Dr. Kevin Mailo and Dr. Wing Lim welcome financial advisor Goran Ogar to the show to share some tax code insights that a lot of general accountants may not know. Goran specializes in complex tax strategies for professionals, the very wealthy, and corporate entities. His understanding of the Income Tax Act is second to none. 

Goran first explains why many accountants and lawyers don’t know all the ins and outs of the tax regulations. It’s a very complex thing to study in its entirety. He then explains how corporate taxation works upon a business owner’s death and how 60% of the assets will end up double taxes so only 40% remains to pass on. How can this be avoided?

In this episode, Kevin Mailo and Wing Lim, with guest Goran Ogar, discuss the strategies to be found within permanent life insurance, how to collateralize on the opportunity for loans on insurance investment, and why strategies are necessary for personal businesses earning over $200,000 per annum. As Wing says, this episode is like reading the table of contents of a book you are very interested in, so there will be more in depth insight from Goran in the future. Start here and keep listening.

About Goran Ogar

Goran Ogar is a financial strategist and advisor recognized by his colleagues for having a unique command of the most complex financial issues as it pertains to corporate tax and legal matters. He started his career in the financial industry in 2001 as an independent financial advisor, and has taught over 500 seminars and workshops on various financial topics. He approaches financial planning by first taking time to learn the specific values that his clients hold dear, then he identifies solutions to their challenges, and communicates a clear and concise course of action that is in alignment with those values.

In addition to the financial advisory career, his entrepreneurial endeavours gave him first hand experience in business. He developed and started businesses in the areas of real estate, recycling, oil and gas, and hospitality. His business activities ranged from startups and initial fundraising to public company mergers and acquisitions. 

Resources Discussed in this Episode:

• Save the Date for May 6-7, 2023 in Toronto
• Goran Ogar on LinkedIn
• Brilyant

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Physician Empowerment: website | facebook | linkedin

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Transcript

Kevin Mailo: [00:00:00] Hi, I'm Dr. Kevin Mailo and you're listening to the Physician Empowerment Podcast. At Physician Empowerment, we're focused on transforming the lives of Canadian physicians through education in finance, practice transformation, wellness and leadership. After you've listened to today's episode, I encourage you to visit us at PhysEmpowerment.ca - That's P H Y S Empowerment dot ca - to learn more about the many resources we have to help you make that change in your own life, practice and personal finances. Now on to today's episode.

Kevin Mailo: [00:00:35] Hi everyone. I'm Kevin Mailo, one of the co-founders of Physician Empowerment. And tonight I'm joined by Wing, also one of the co-founders, and he is going to be interviewing an associate of ours, Mr. Goran Ogar. And I'm not going to introduce Goran. I'm going to let Wing do that, but I'm going to introduce the topic. And the topic is this: Aspects of the Canadian tax code that your accountant or lawyer may not be aware of. So a bit of a controversial topic and a very fascinating deep dive. And I'm really looking forward to this one because Goran has a ton of background in tax planning for high net worth individuals as well as businesses and start ups. So with that being said, I'm going to step back and I'm going to let you run the show here, Wing. Take us through this great topic.

Wing Lim: [00:01:26] Right on. Thank you. So I'm Wing. Dr. Wing Lim. I'm one of the co-founders of of Physician Empowerment. And some of you know me very well, some of you I may not know. Anyways, I'm absolutely excited to interview Goran tonight. Goran and I went back 20 some years ago. A past kind of crisscross, and then we're working on some really interesting stuff together. So yes, so the topic is highly controversial, but let me introduce why I would interview Goran? He's one of the most interesting guys I know and we say that our webinar and podcast, we want to interview interesting people and interesting topics. So Goran, of all, he came from Serbia and of all places that he chose to fly to, he chose the Frozen North called Edmonton 25 years ago and he actually became a preacher, went to school, become a preacher, and ended up in the financial world. But not just that. He did a bunch of start ups, different companies. He's a serial entrepreneur. I consider myself one of those too. And it's not open up serial companies, it's serial as a bunch. And he's taken some companies public that's in the oil and gas industry and others, and he's done restaurants and different things. Him and his wife both like they they cook so well, it's like MasterChef, and they fix a meal for me and my wife, it was absolutely amazing. And so Goran is not the type of financial advisor that goes around drumming up clients. He has a select suite of select high net worth clients, and some of them are in this professional space, but some are extremely wealthy. And he, I would call him specializing in complex tax strategies. He's been retained by various companies to do retirement planning, and two of which that is in our city, is University of Alberta and NAIT - North Alberta Institute of Technology. And these are, and they hire him just to help people retire. Right? So without further ado, Goran so tell tell us about your yourself, your journey, like it's really interesting path you crisscross.

Goran Ogar: [00:03:33] Yeah well I came back in mid-nineties to Edmonton to study theology of all things, and when I finished my undergrad studies I continued for the master's degree and had a really good friend who was a financial advisor. He showed me strategies that he was doing - in particular tax strategies that he was doing - for his clients. And I just fell in love with the process of strategizing, figuring out different things. And the bottom line for me was figuring out how to, and learning how to reduce the tax burden. And so that was about 21 years ago. And I decided at that time to join a company, Assante Wealth Management is the company I joined, and became a financial advisor. And one thing that was very interesting for me, because before getting into financial industry, I was a teacher at local college here and teaching was the only thing that I knew how to do at the time. So I prepared courses on financial planning and tax strategizing and approached large companies in Edmonton area. And the University of Alberta was one of them, NAIT was another, Sherritt International, Dow Chemical and dozen other companies. They hired me and I was doing their financial planning, educating their employees for probably about 12, 13 years or so. But in that period, getting to know and meeting lots of entrepreneurs, I myself decided to become an entrepreneur myself and in the process started several companies in oil and gas, in tire recycling, hospitality. That was probably the most painful experience, owning the restaurant. I wouldn't advise anybody, you know, unless you're so passionate, but hey, I did it and it was a fun experience. So, and lots of good stories to tell from that.

Wing Lim: [00:05:23] That's good. The good, the bad and ugly. And so, okay. So with that diverse background, of course you dealt with some really high net worth family offices and individuals, and there are stories that - I don't want to belabor everybody, but there are people worth double digit million - and then their tax advisers goofed. Right? And then as a result, they paid millions and millions of dollars in tax they shouldn't have. So for our level, regular human beings, doctors. So what? So what could possibly, the tax code, what could possibly our accountants and lawyers not know? Didn't they go to school?

Goran Ogar: [00:06:02] Well, they did. The challenge is that the Income Tax Act is about 3500 pages thick. And in order to reduce taxes, you need to know the rules. And to know all the rules is pretty difficult. You really need to have an income tax act as your bedtime read. And very few people do that and on top of income tax, there's income tax regulations as well. That's another 1500 pages. So when you start looking at the whole picture of how the taxes are regulated in Canada, there's lots of material to study. The challenge is, in particular for lawyers and for the accountants, is many of those things are not even being taught during their education as they're getting their certification degrees and being actually accepted to the bar, because other things are more interesting. And there is, there are other things that are more of a focus. So the taxation does ends up being a really specialized field because even every accountant you will come across a tax accountant. So there is a general account, there is a tax accountant and actual tax accountants, very few of them are out there. Most of them are, most of the accountants are general accountants, so they don't focus on strategizing and the strategies that would be applicable both to the individuals and the small businesses or any size business. So the taxation is really narrow field and there are way too few, if you will, specialists in that regard.

Wing Lim: [00:07:36] Right on. And so we, those of us who are married, said the vows till death do we part. It might hold true for marriages. It doesn't hold true for taxes. And sometimes till death do we start, right? And so. So maybe we should start there. So let's start with the end in mind. Right? So what happens when we pass on? We say work all our life, save the money, and then what does this tax man get if we just don't do capital planning?

Goran Ogar: [00:08:13] Yeah. The big challenge is in particular with people who own corporations and most of the physicians are corporate owners. You are a business owner, you run a business whether you feel that you are a business owner or not, you are. That's the bottom line. And essentially, when a person, business owner who's, let's say 100% or 50% business owner, when that person passes away, the corporation is deemed as disposing of all the assets. So the corporation gets taxed pretty much at the highest marginal tax rate when the owner passes away. So the corporation gets taxed at about 50% tax rate. Now, the next step is for the assets to pass to the estate. And as an inheritance, there is another layer of tax that comes on top of that that the estate is going to pay at the disposition of those assets. So unless there is a proper tax planning, there is double taxation at the corporate level and then at the personal level. And that tax could be easily north of 60% of the total assets that would go to the government.

Wing Lim: [00:09:24] So wait a minute, wait a minute. So you say, okay, so we work our butts off over the years. Let's say we save $1 million in assets passes to the next generation. So what really passes to the hands of our children is only 40%.

Goran Ogar: [00:09:39] Roughly 40%, if no planning was done. Right?

Wing Lim: [00:09:43] Wow. So what about what about these RSPs that everybody's racking up? I've known people rack up millions of dollars in RSP and then become whatever Lira. And what happens to those?

Goran Ogar: [00:09:54] Well, when the person passes away, if that's the last person, let's say in a couple, right? So all the assets are considered to be sold. So full withdrawal of the RSPs happens. And pretty much if there is $1 million in the RSPs that's considered in the terminal year, the year of death, that's considered as an income to the person that passed away. So at $1 million, that would be the highest tax rate depending on the province where you are, 2 or 3% up or down from 50% of the money would go to the government depending on the province. So 47, 48 to 53% in Canada goes to the government from the RSPs. Same with Lira, right? The only actually type of account, registered type of account, that would not be hit by that is TFSA, tax free savings account. But unfortunately, with the tax free savings account, there is very limited amount of money that could be invested in it.

Wing Lim: [00:10:56] That's so good that the government has to limit it.

Goran Ogar: [00:10:59] That's right.

Wing Lim: [00:11:00] Yeah. Now, the other thing, the government, is so good that the government have to limit it is insurance.

Goran Ogar: [00:11:06] That's right. Yeah. So there are three types of insurance, actually two categories. There is term insurance and there is permanent insurance. And permanent insurance could be as universal life and whole life. What's interesting is about five years ago, the government reduced the amount of money that could be placed inside the insurance. And when I say placed inside the insurance, permanent life insurance is very different from the term insurance. Term insurance is only insurance that has pure insurance cost in it, plus some administration fees and stuff like that. So it's kind of like people consider it as a cheap, the least expensive type of insurance. It's not, actually it's even more expensive When you look at the net cost of pure insurance, it's slightly more expensive than net cost of pure insurance inside the permanent policies. Now, with the permanent policies, that's universal life and whole life, there is the insurance component, but there is also the investment component. In the past, government used to allow a significant amount of money to go into the investment portion of the permanent policies. And the challenge for the government was that the investment inside the insurance is exempt from the taxation. So it behaves in a similar way like tax free savings account. And essentially a person could put a large amount of money to grow at your discretion. If it's universal life, you can invest however you want - mutual funds, stocks, index funds - whatever you want to have in your portfolio. And that money would grow on a tax free basis and at the time of passing, it would go to the estate on a tax free basis as well. But also a person could withdraw from there in the form of a collateral loan or a straight withdrawal. We can get into it a little bit later, but about five years ago, the government decided to reduce the amount of money that the person could invest inside the universal life policies simply because lots of people were put in a significantly large amounts of money into those life insurance policies and without paying any tax on them.

Wing Lim: [00:13:29] So that's that's actually the wealthy people secret weapon, right? They have so much inside this TFS on steroids which is insurance, permanent insurance, and jacking up just getting fatter and fatter. And at the end the government gets so little tax out of it, they have to limit because it's so good.

Goran Ogar: [00:13:49] That's right. There are certain strategies, we're not going to go into all the details because our time is limited from that perspective. But there are certain strategies that could be used with the, within those policies, and with the corporation where literally corporate money could be withdrawn outside of the corporation without triggering any tax.

Wing Lim: [00:14:10] Yeah. Now so we don't have time to go dive into that. But this is very interesting. So would you, so comparison number one, you have a bunch of assets portfolio. You know usually the regular Joe doctor goes to the regular Joe accountant and they say, okay, pay yourself T5, save a bunch of money in the corp and invest in the corp and build up the portfolio. And upon death, like you say, there's double taxation. There's like 60% gone to the tax man. So what happens if there is an insurance policy?

Goran Ogar: [00:14:41] So essentially how it works with insurance policy, let's say if it's corporate owned insurance policy, so there is no withdrawal of money outside of the corporation. If a person would set up insurance policy, they could dump in a large amount of money as an investment inside that policy. So that money would number one, it would grow tax sheltered. What it means is there would be no taxation. So again, similar to the RSPs or tax free savings account, as compared to regular investment inside the corporation, which would trigger passive income taxation. And at about three, four years ago, the government actually was addressing the passive income inside the corporations. And if your passive income is over $50,000 per year, you lose the benefit of the small business deduction, which means you're getting taxed as a large business. Even on the first portion of a half $1 million. With the life insurance, permanent life insurance policies - so universal life or whole life - you completely bypass the passive income taxation. Now, if the investment inside the policy grows and let's say if it stays there 34 years until a person passes away, the proceeds from the insurance are paid into the corporation, number one, on a tax free basis. So they hit the corporate account on a tax free basis. The corporation does not pay any money in tax and as a result, proceeds from the insurance create something that's called capital dividend account or short, abbreviated CDA. The capital dividend account is a notional account, so it's used only for the accounting purposes. But that account allows the funds from the corporation to be passed on to outside of the corporation on a tax free basis. So which means all the assets that are accumulated inside the corporation within that policy would pass to the heirs without triggering any tax at all. So even if it's corporate money.

Wing Lim: [00:16:54] Wow. So let's dial back a little bit. So same thing, right? So you work your buns off, have $1 million nest egg. Right? So you put it, uh, hide it inside a policy, permanent life policy, which is corporately owned by your place of work or whichever, so upon death is not just the insured amount - whatever 1, 2, 3 million - that goes to your offspring, but also the growth inside it is tax free compound over 30, whatever decades. And it goes down tax free.

Goran Ogar: [00:17:25] That's right. Yeah.

Wing Lim: [00:17:27] So then then so the comparison is we, my wife was a financial planner like 30 years ago, and at that time we read the book The Wealthy Barber, and said, okay, buy term life the cheapest to hold it personally, then you don't have to worry about pulling it out of the corp. Then the difference is a million, you only get 400 down to your kids or 300 versus a million. So for us to believe in that, we have to work 2 to 3 times harder to save a million to the next generation. That's absolutely crazy. But that's, everyday Joe, that's the advice that we got.

Goran Ogar: [00:18:02] Yeah, well, that's the challenge with the advice. That's the challenge with the taxation. Because even I had an opportunity to chat with an accountant, one of my client's accountants - this was about 4 or 5 weeks ago - and the conversation revolved about the taxation and certain aspects, and I mentioned a different accounting firm and certain strategy. I was going to send the documents that I received from that accounting firm, kind of saying that the strategy is okay and that that's what they recommend to the clients. His comment to me was, Well, I don't like what they're saying because they approve of capital gains stripping. I'm not going to go into that strategy. But it's a very unique strategy. It's called, in other words, a pipeline strategy for a corporate tax planning. He was upset because the other accounting firm utilizes that for their clients. Well, the other accounting firm is actually a large national firm. I'm not going to name that firm, but it's a large national firm that has a very good auditors and frankly, CRA does not come against them very often, if ever. So they're utilizing this strategy that the other accountant that did not approve. Why? Simply for the lack of understanding and knowledge of certain aspects of a tax code.

Wing Lim: [00:19:35] Right. Now, so yeah, this is very interesting. So let's move on. So do we have to, all these benefits just from one strategy you're talking about, do we have to wait till we die to benefit from.

Goran Ogar: [00:19:48] No you don't. No, because, so let's say with with the permanent policies, if they're a part of the corporation and if the funds are accumulated inside the corporation, you can either withdraw money from it. Now, it would be taxed if it's withdrawn outside the corporation. Another option is to use those funds and use it as a collateral asset for the loans, and pretty much every major bank in Canada will lend you money against a permanent life policy outside of the corporation for the corporate asset. So the way we structure it often is, let's say if there is retirement planning, so an individual, a business owner, would invest a large amount of money inside the insurance policy. When the time for the retirement comes, they would just have a series of loans outside of the corporation, which would be a tax free money to them. Let's say a series of 20 loans, 20 annual loans for the 20 years. So all the the money is not withdrawn. It's alone. The investment inside the permanent life policy continues to grow. And upon death the insurance policy pays the proceeds to the corporation, as I mentioned earlier, from the corporation it gets on a tax free basis to the heirs or to the estate outside. A portion is used to pay off those loans and the rest stays tax free with the family or with the heirs. So a person can simply use that, collateralized, use a loan as a tax free income in retirement against the assets inside the policy.

Wing Lim: [00:21:38] And in case this makes your head spin, don't worry about it. We'll have future sessions that dive into these strategies. Today is opening, by talking to Goran it's like going to a bookstore and find a very interesting book or novel and you open it and you just look at the table of contents and you're really attracted. So this is, today is one of those because there are so many interesting things. Now, let me recap it in layman's terms. My understanding is instead of going buying a cheapest term life insurance under your personal name and then pay yourself T5, the different advice that that we get here, or different brain wave, different wavelength, is actually put it inside, buy a permanent life policy inside your corporation and stuff as much as you can and build it up, build it up to be tax free. And not just that you collateralize it, right? So you borrow the money out and pay whatever prime rate or whatever. And then, but then now it's a loan under your personal name. So it's not under your corporation. It doesn't have to be in a corporation anymore. So you don't have to worry about this passive income thing. And then so you can invest. So then you have your nest egg inside a life policy that's growing, but you take it out, collateralize it, and you still, and you now you can invest again. So you got two, two piles growing. Is that true? Goran?

Goran Ogar: [00:22:59] Uh, sorry, could you repeat?

Wing Lim: [00:23:01] So your life policy is growing, right? Tax free. But you collateralize, so you borrow the money out.

Goran Ogar: [00:23:07] That's right.

Wing Lim: [00:23:08] Now you can go invest again. So. Have a second pile growing.

Goran Ogar: [00:23:12] Exactly. So what lots of people do is they would have a policy inside the corporation. They would borrow money outside the corporation and not spend that money, but actually use it for the investment purposes. So essentially, it's using a corporate money in the personal environment now, where the taxation is actually lower than inside the corporation, and that's additional benefit that could be used. So the interest in that regard becomes also tax deductible.

Wing Lim: [00:23:44] Right. And then a lot of struggling young physicians, right, we met young colleagues by the time they finish med school, they are $250 to $300,000 in debt. Right? And so they if they have this kind of policy and they do a collateral loan, and so they can pay off a little bit and still sock some money away. Right? Or can sock away for a nice retirement. So this now, this alone is amazing. What... give us another, what else would a regular physician, should should we do if we, now that we have this thinking cap on, what else would you advise? Like what other corporate restructuring strategies would you recommend?

Goran Ogar: [00:24:24] So depending on a personal situation, of course, and everybody's situation is different. But typically when I have my wish list for my clients, when I look at their situation, and that's restructuring the type of income that they draw out, I understand that people have to take out T4 income. But if you're taking T5 income, you can look at reduction of your CPP income to reduce so that you're not paying CPP, because many people are not going to use it. So for me, number one income strategy would be looking at the pipeline strategy. So I would advise many individuals, if you have income of, let's say, $200, $250,000 per year or more, utilizing pipeline strategy or capital gains stripping, would reduce your income by half, literally. Number two is setting up a permanent policy for estate planning, for retirement planning, or for immediate financing for other investments and stuff like that outside of the corporation or for a different corporation. Number three, I would say setting up a family trust, family trust and keeping the assets inside the family trust. Family trust for a reason, there are tax reasons, but also there is a control reason that will help you save money from creditors. If there are certain situations in life, there are many things that can happen that with a family trust, actually you can prevent negative consequences from happening.

Wing Lim: [00:25:59] Like a divorce of your kids.

Goran Ogar: [00:26:00] That's right. Exactly. Yeah. Yeah. Because with the family trust you can avoid even for your kids, you know, prenup agreements and stuff like that, which is often a tough conversation to have. If a person is a donor, if you like to donate money to charities, I would look at setting up a private foundation as well for those purposes, because with the private foundation, whatever you put into the private foundation, you get pretty much about 50% tax credit. But you have to spend only 3% of whatever is inside the private foundation for the charitable purposes in any given year. So those are kind of like four strategies that I would look at seriously considering setting up pretty much every business owner. Now, there are other strategies as well that could be applicable for various situations, but these four, I would say, are the core when it comes to tax savings for business owners.

Wing Lim: [00:26:56] Right on. Yeah. So somebody's already made a comment like we're drinking from a fire hose already, so 30 minutes just came and gone like that. So a couple of questions left from me. Why wouldn't more advisors tell us this?

Goran Ogar: [00:27:12] Well, I would say, number one, there is a lack of knowledge when it comes to these strategies, and I think that's the biggest issue. Number two, there is, from the accounting perspective, there is only accountants, there is always fear that you are too close to the line and that you shouldn't walk too close to the line. So I would say those two things - the lack of knowledge and fear of stepping over the boundaries - are probably the two most the biggest reasons why we don't hear about those strategies.

Wing Lim: [00:27:46] Fair enough. Fair enough. And that's why we're here to empower everyone, right? The empowerment process to empower you to ask smarter questions, write to your advisors. That's then the last question I have, if we have run of the mill advisors, we feel stuck. Do we fire them or what do we do? What are our choices and steps?

Goran Ogar: [00:28:06] I mean, that's difficult to say, you know, because I'm an advisor myself. Right? But the challenge is there are lots of good advisors out there, but there are few in comparison to the number of advisors that are there. So looking and finding a competent advisor who knows his stuff and who's willing to tackle the taxation and the estate planning and the strategies that are involved, who is willing to go extra step, if you will, with strategizing, I think would be probably the most important thing for an individual to do.

Wing Lim: [00:28:43] So what, at what time should one retain a tax lawyer? At a cost?

Goran Ogar: [00:28:50] Yeah, I would say for tax lawyer in particular with the income of $200,000 plus, I think a tax lawyer is a must because the cost for a tax lawyer at that point, percentage wise as a percentage in relation to the income, becomes justifiable.

Wing Lim: [00:29:08] Right. Yeah. Well, that's absolutely amazing. So I can share with people that, that I've learned tons and tons over the years. And when I tell people, when I meet with my accountant once a year is not ask my accountant, what do I do? Is I like do the Vulcan mind meld like Star Trek, but I suck him dry. I drive the two hour conversation and then I would pay the tax lawyer to give instruction to my accountant. Right. So that's, and inspired advisors like you, Goran, right are so, that is so rare. So rare. Well, so I want to thank you for this really, really valuable small lesson. And you definitely will be back many, many times. Let's open up the floor because we want to keep it lively a little bit. So, Kevin, maybe you can take control.

Kevin Mailo: [00:29:57] Yeah, I'll be happy to moderate. And I'll add that Goran is going to be joining us for a portion of our conference May 6th and 7th. So we got those comments, you know, from some of our webinar guests say it feels like drinking from the from the fire hose, listening to Goran talk, I couldn't agree more. And I'm right in that category myself. So if you're feeling overwhelmed or there was a lot here, this is going to be up on the podcast, so you can always listen to it again. But more importantly, just reach out to us, connect with us. Goran is going to be at the conference to answer these questions and explain these concepts in more depth. Because there is a lot here. And like Wing said, we're just glancing at the chapters of a very big book here. But if we do this properly, this can mean hundreds of thousands of dollars over the course of our careers. Right? And we sit there chasing returns on the public markets or other investments. And we're not, we're not really paying attention to the single biggest line item in our lives, which is personal and corporate taxation. So it's worthwhile doing what Wing does. Learn some of this stuff better than your accountant so that your tax lawyer can send instructions over. But that takes time and I'd encourage everybody to come and join us May 6th and 7th for a bit of a deep dive in some of these topics. So with that being said, if anyone has questions, go ahead and ask them or reach out to us via email or connect with us on the website.

Kevin Mailo: [00:31:19]  All right. We got one question. We got one question. From one of our master class participants. Thanks, Goran. Is the investment in whole life insurance going to be managed like mutual funds? You sort of touched on this earlier. Do you want to explain that a little bit more?

Goran Ogar: [00:31:34] I did, and I do, yeah. So there are two types of permanent insurance. There is universal life and there is whole life. With the universal life, you manage the portfolio just like your mutual funds portfolio. So you have probably 500 choices, with most of the companies you have 500 choices of the investments. You manage them like a mutual fund. With the whole life in particular, the company gives guarantees. So the insurance companies, they manage that portfolio for you and the income is fixed. So there is no fluctuation like in mutual funds. So they're not phased, but whatever is happening with the market. So the income is fixed on the whole life.

Wing Lim: [00:32:21] Which is amazing already.

Kevin Mailo: [00:32:25] Wow. Are whole life premiums like a corporate rate expense? I'm hoping I'm getting that right.

Wing Lim: [00:32:32] Is it a corporate expense?

Kevin Mailo: [00:32:35] Yeah.

Goran Ogar: [00:32:35] No, it's not. There is a very narrow reason when a life insurance could be a corporate expense. That is, if the bank, let's say if you're borrowing money from a bank, if they require that the principals of the corporation be insured, life insured, only then the premiums end up being corporate expense.

Wing Lim: [00:33:00] So you mean when we buy a life policy, like a whole life policy, for example, inside a corporation is a personal expense not a corporate expense?

Goran Ogar: [00:33:08] No, it's not considered. So it's after tax dollar to the corporation.

Wing Lim: [00:33:14] Okay. But it's still inside a corporation.

Goran Ogar: [00:33:17] It's inside the corporation, that's inside.

Wing Lim: [00:33:19] Inside PC not personal.

Goran Ogar: [00:33:20] Inside PC. It's not personal. That's right. Right.

Speaker5: [00:33:25] Hi. Thanks. Sorry, I can't come online. I can't show my face.

Kevin Mailo: [00:33:31] All right, go for it. Go for it.

Speaker5: [00:33:32] That was very, um, my head is still spinning. So lots of good stuff, right? So I just wanted to be sure that it's like, after you do your tax year and you have money left over, you pay taxes on it. So whatever you do with that, you can buy life insurance with that, just like you would do an investment in your corporation. So it doesn't have to be from the personal side.

Goran Ogar: [00:34:03] Yeah,it's not from personal side. So if it's corporate owned, exactly how you explain. So after you pay corporate tax, then you use those funds to invest money inside the permanent insurance.

Speaker5: [00:34:15] Okay. Thank you very much.

Goran Ogar: [00:34:17] Very welcome. I see the question, what about term life insurance? Same thing with the term life insurance. Only if the lender requires that there is life insurance on the principals, then the term life insurance could be deductible. Otherwise it's not. To the corporation.

Wing Lim: [00:34:43] There's another question. There's somebody raising hand, but there's a question ahead of that. Who would you recommend, like term life insurance versus whole life insurance?

Goran Ogar: [00:34:52] Okay. So where I would recommend the term insurance is, for example, there is, let's say, a startup company and there is a buy sell agreement between the partners and they're planning to build the company and sell it maybe in 5 to 10 years. So where there is an exit strategy that close, then I would say go for the term insurance rather than the permanent insurance for the reason of it's less money to be put in because more money is required for the corporation maybe to run. In that case, I would say term insurance because there is no other plan in a tax planning that's involved. Now, if the desire is to do additional tax planning, then I would look at the strategies with the permanent insurance. Does that answer the question?

Wing Lim: [00:35:45] So in my mind, just my 2 cents worth, we all have cell phones, right? And I would say that the cheap term life is this is a phone you can call somebody. But now people use more than just phone, right? Your whole life is managed. Right? So whole life or permanent life policies is not just a term, but a bunch of other stuff. You can use a lot more.

Goran Ogar: [00:36:05] That's right. Now, what's very important to remember, the premiums for the whole life appear to be more expensive than the term insurance and I carefully use appear to be more expensive. The cost of insurance is actually pretty much the same. Term insurance ends up being even a little bit more expensive, about 5% more expensive, than a whole life insurance because the rest of the money, whatever is the difference in the premiums, so whole life being a higher than the term insurance in terms of premiums, the spread that's here is actually what's going toward your investment as a cash value eventually that could be used for the retirement or as a collateral what we discussed earlier. And so term only appears to be cheaper. But in reality they're more or less the same cost.

Kevin Mailo: [00:37:02] You mentioned a number of strategies like capital gains stripping, whole life, family trust. Is this one after the other depending on net worth? At what net worth would these be applicable? So how do you deploy these? How do you put these together? Or do we need to sit down with someone like you, Goran, who says now's the time to do a trust, now's the time to do capital gains stripping, all that. How do we deploy all these strategies? Right?

Goran Ogar: [00:37:29] I wouldn't say there is - how would I say - there is a rule at the net worth thresholds when you start applying these strategies. With the capital gains stripping, I would say income over $200 to $250,000. That's when you start with the capital gains stripping. With the whole life, you can start at about $150 to $200 or more. With the family trust, I would start looking probably at about $350,000 income. And then with the foundation, the foundation would come after that. So there are certain stages where a person would apply one strategy and then when they hit another threshold in income, then apply another strategy. Et cetera. And beside these four strategies, there are other strategies as well that depend on the net worth of the individual. There is always a potential for the offshore tax planning and stuff like that. So yes, to answer that, it depends on the net worth which strategies would be applied, at what stage in life. Does that answer the question?

Kevin Mailo: [00:38:42] I think it's great.

Speaker5: [00:38:43] Yes. Thank you.

Goran Ogar: [00:38:44] You're welcome.

Speaker6: [00:38:46] Sorry. I'm not sure if we got you.

Goran Ogar: [00:38:49] Now we can hear you.

Speaker6: [00:38:50] Oh, really? I've been typing for the last two minutes of my question there, so.

Kevin Mailo: [00:38:55] No, no, no. Go, fire!

Speaker6: [00:38:57] Okay. Thanks a lot. Like, you've been, like, really enlightening and helpful on really making the tie between the strategy and how it's used in corporations, because I did read about this, especially in the States, and I've asked locally and tend to only get like deer in the headlight looks from advisors. So it really sounds like you've known how to put this thing to use. It's a bit of like a personal scenario kind of question, but one way, well, there's really two questions. One way I saw potentially using this strategy is in 4 or 5 years we wanted to maybe do something like building a house. I understand there's a bit of like a build up to this, the whole life insurance before it starts paying its own premiums. I'd just be curious to see if you've ever used it this way so that essentially those loans can be taken out, taken out personally to do something like to pay for like a house build or a mortgage or something like that.

Goran Ogar: [00:39:59] That's right, it could be. Yeah. So there is a strategy that we called immediate financing arrangement where you can set up a whole life policy and you can literally collateralize that immediately and get 100% of the premiums outside of the corporation as a personal loan immediately, pretty much. So whatever the amount of money is that you would need, structure the premiums for the whole life to be in that range and then you can borrow it outside of the corporation personally right away.

Speaker6: [00:40:36] Wow. Okay. That sounds pretty powerful. And the second piece was like, is it ever too late to implement like working towards like a whole life? Let's say somebody had collected or done the RSP route for many years. Is there a way to to move things around or how would that work?

Goran Ogar: [00:40:59] Yes, there is. Yes. Now, on the personal side, so this would be outside of the corporation, you see. As long as the person is comfortable using loans, what I've done in the past is I would set up an investment loan and I would pay the interest from the RRSPs. You see, because investor loan for the investment purpose, the interest that you pay on it is tax deductible. The income that you withdraw from the RSPs is taxable. So essentially you would be using RSP money to pay for the interest on a non RSP loan so they would neutralize each other from the tax perspective. That way you could freeze the RSP growth and slowly start transferring money into the non RSP vehicle with significantly better taxation than the RSPs down the road. So.

Speaker6: [00:41:57] Okay. I think I'll have to like draw a chart to make that make sense to me. But I think I got what you're saying.

Goran Ogar: [00:42:02] So again, you have RSP, you have a loan, and let's say RSP is, I'll just use round number for for the sake of illustration, the RSPs are $100,000. The loan is $100,000. Let's say the interest is 5%, which is $5,000 per year. You withdraw from the RRSPs $5,000 per year, which would trigger tax on the $5,000 per year. But the moment you pay the interest, the tax is neutralized because the interest on the loan for the investment purposes is tax deductible, you see. So you're feeding the loan, if you will, with the RSP money without triggering any tax.

Kevin Mailo: [00:42:44] Wow. Wow. Absolutely. Wow. Goran.

Speaker6: [00:42:52] Yeah, it's cool.

Goran Ogar: [00:42:54] Does it make sense? Does it make sense now the way I explained?

Kevin Mailo: [00:42:57] Yeah. Wow.

Wing Lim: [00:43:01] Well, there's so much now to do.

Kevin Mailo: [00:43:04] We got another question. Let's go. All right. We'll we'll find some way to cover all this later. Okay. About whole life insurance, as you mentioned, a few years ago the law changed. And this participant wrote in, I purchased one policy prior to that change in the law. But what was the change? Can you explain the change in whole life?

Goran Ogar: [00:43:25] Yeah. So number one caveat. If you bought it before the change, your policy is grandfathered. So the old rules applied, which means what's in insurance industry called MTAR Room. So it's an acronym. But essentially what that is, it's the amount of money that you can invest inside whole life policy for the cash. So the government saw that that amount was being, let's call it abused, from their perspective or overly used. So they decided to reduce the amount of money that could be invested on an exempt basis inside the whole life policies. So that reduction was probably to the tune of about 30% that they cut it down. So back in 2016, you could put significantly more money as an investment portion inside the policy as you can right now. But there are ways to work around that as well. So there are not straightforward as it used to be before, but there are ways to increase that investment portion. So to answer your question, if you purchased yours prior to the changes, nothing would change to you. For people who did not buy it at that time but bought it in 2017 or later, the amount of money that they can invest inside the policy is significantly reduced then to your policy.

Wing Lim: [00:44:59] All right, this is awesome. Now, so I'm aware of the time as well. Now, there was a comment earlier in the chat and that is, oh, this sounds so expensive. So can you go on all these strategies? What kind of cost and is it cost benefit ratio? How do you balance that?

Goran Ogar: [00:45:17] Yeah, the reason I mentioned some of those thresholds is that proportionally to the income, so whatever strategy you implement in proportion to your income, it would be significantly cheaper to implement those strategies. Even if you need to pay a tax lawyer let's say $10,000 to set up one of those strategies for you, $10,000 in that strategy would probably save you $50, $60 or $100,000 in income tax. So it may sound expensive just to write a cheque, let's say, to a lawyer, but when you look at the tax that you would save, it ends up being actually more beneficial to pay a significantly smaller amount to the lawyer than to the government.

Wing Lim: [00:46:08] So from personal experience, okay, so if you don't know anybody, you have no discount pipeline could cost you 35 K, but it saves you if you do $1 million pipeline suck out of your corp, you can save $375,000. So in that savings is 300 K so, right? I've done it twice. So there's always a cost and then a good advisor would help you work that through. Right. So if you only have so little pool, for example, you pull 50 K out, it's really not worth it. Right.

Goran Ogar: [00:46:39] That's right. Yeah.

Wing Lim: [00:46:40] Yeah. So. All right, good. Now, so this is, this is awesome. So now, so I don't want to drown everybody because this is already a whole lot of information. And I think the whole point is to expand your brain, right? I think our brain is like, what do you call it? The airbag driving. Once you decompress it, you need to shove it back and you can't. Right? So my brain, that happens multiple times. And so hopefully tonight that creates this decompression in your brain. This is a good place to wrap up.

Kevin Mailo: [00:47:10] Yeah, I think that ought to cover it. And clearly, clearly we've got to get Goran back on for another webinar, for a podcast episode, because this was probably our longest by far and away because it was so good. We loved it. Wonderful. And I'm going to wrap up here before my busy six year old starts taking up all my time and and space. But again, Goran, we sincerely want to thank you for coming on today. It was absolutely outstanding and we're looking forward to having you at our national conference, uh, this May 6th and 7th.

Goran Ogar: [00:47:46] Yeah. Looking forward.

Wing Lim: [00:47:48] Thank you, Goran. Really appreciate your time and your wisdom.

Goran Ogar: [00:47:50] Thank you, guys. Yeah.

Wing Lim: [00:47:51] Thank you, everyone, for attending. Good to see you all.

Kevin Mailo: [00:47:54] Thank you so much for listening to the Physician Empowerment Podcast. If you're ready to take those next steps in transforming your practice, finances or personal well-being, then come and join us at PhysEmpowerment.ca - P H Y S Empowerment dot ca - to learn more about how we can help. If today's episode resonated with you, I'd really appreciate it if you would share our podcast with a colleague or friend and head over to Apple Podcasts to give us a five star rating and review. If you've got feedback, questions or suggestions for future episode topics, we'd love to hear from you. If you want to join us and be interviewed and share some of your story, we'd absolutely love that as well. Please send me an email at KMailo at PhysEmpowerment.ca. Thank you again for listening. Bye.

Dr. Kevin Mailo and Dr. Wing Lim welcome Brennan Carson, CFA Head - Solution Wealth Portfolio Manager, to the podcast to talk about market mindsets and mentalities. Brennan’s goal is to always build diversified portfolios that deliver consistent returns for his clients and he discusses how that works in the markets with Wing and Kevin. 

Brennan addresses the change between 2022 and what is forecast for 2023 and how interest rates drive much of what happens in financial markets. He differentiates between the public and private markets, how much greater the wealth in the private market space is, and discusses how many different aspects of market investments are available. It isn’t just what stocks are publicly traded, and Brennan has advice on themes for portfolios and what to look for in terms of stability. 

In this episode, Kevin Mailo and Wing Lim discuss with guest Brennan Carson the benefit of index funds, why a focused concentrated portfolio is advisable, and how Brennan and his team approach new clients. Brennan shares how the discovery document is vital to client understanding and details how he approaches each client individually based on their needs. This episode highlights how having the right investment quarterback to manage a team of specialists enhances wealth plans overall. 

About Brennan Carson

Brennan Carson has spent almost 20 years in the financial industry preparing for the unique opportunity to provide wealth management service and advice to clients with the simple goal of doing it right. His team calls themselves Solution Wealth Management (a division of eQuaTe Asset Management Inc.).

Over the last two decades, Brennan has had the good fortune to work hands-on with individual clients, investment advisors, and institutional investors. Each experience gave him more insight and knowledge on how to help turn financial goals into reality. Now he applies this experience to offer his clients a comprehensive approach to wealth management.

His investment objective is to build diversified portfolios for his clients that deliver stable and consistent returns and lower volatility. This approach generates more consistent long-term performance and fewer worries. His team’s investment platform provides access to five unique asset classes, each with its own return & risk benefit: stocks, private equity, real estate, income funds, and real return portfolios. 

Resources Discussed in this Episode:

• Save the Date for May 6-7, 2023 in Toronto
• Brennan Carson on LinkedIn
• Solution Wealth Management

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Physician Empowerment: website | facebook | linkedin

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Transcript

Kevin Mailo: [00:00:00] Hi, I'm Dr. Kevin Mailo and you're listening to the Physician Empowerment Podcast. At Physician Empowerment we're focused on transforming the lives of Canadian physicians through education in finance, practice transformation, wellness and leadership. After you've listened to today's episode, I encourage you to visit us at PhysEmpowerment.ca - that's P H Y S Empowerment dot ca - to learn more about the many resources we have to help you make that change in your own life, practice and personal finances. Now on to today's episode.

Kevin Mailo: [00:00:34] Hi, everyone. We are so glad to have you out tonight. I'm Kevin Mailo, one of the co-founders of Physician Empowerment and it's Wing and I tonight on a Friday evening here in December as Christmas approaches, but Wing and I on the webinar and it's been a while since we've both been together here. Now I'm going to just say that for those of us  on the webinar who are attending, it was supposed to be Dr. Dimitre Ranev, who teaches alongside us at Physician Empowerment, who was supposed to be talking about market mindsets. Because of a scheduling issue, he's not able to make it. But we are very, very excited to have portfolio manager Brennan Carson speaking with us tonight about market mindsets and Wing is going to be conducting the interview. So why don't I let you go, Wing, and I'll just step back.

Wing Lim: [00:01:21] Sure. So good to see you guys and some of you know me. I hope we have met. Anyways, so we're co-host, co-founders of Physician Empowerment. And so market mindsets, so of course, Dimitre would have had a unique twist based on his personal experience. And when there was a conflicting time scheduling conflict, I thought, who would we want to interview for market mindsets? How about somebody who does it on a full time basis, right? In this world of - and I'm going to introduce Brennan in a minute - but in this world of DIY, everybody want a nickel and dime and DIY themselves to suns like wealth land.

Kevin Mailo: [00:02:02] Oh yeah.

Wing Lim: [00:02:03] So sunset and everything is going to be fine until they do some crypto and hit a few colleges.

Kevin Mailo: [00:02:10] So they have a 2022.

Wing Lim: [00:02:13] Yeah, exactly. So there's a lot of market corrections and it's not for the faint of heart. And I happen to follow a lot of economists and a lot of people in the know, and this is not an easy path. That's why in a master class, which I'm putting in a plug in, we talk about all these jungles where the jungles - that the DRAT - the risk jungle, which is what we're going to talk about next Wednesday. Get navigating the risk jungle, there's the asset jungle, there's the tax jungle and asset jungle. So I would like quickly pass the mic to Brennan, and we're going to actually go back and forth and the three of us is going to have a really informal chat about market mentalities. But Brennan is a full time portfolio manager who actually picks and chooses stocks and other than stocks, bonds and other public and actually private assets. And he's the mandate to do that for his clients and he has a unique practice that he doesn't sell a specific fund to you and he's trying to create a tailor made thing called bespoke kind of practice, which is what we would like at Physician Empowerment and empowerment office. So I come to know Brennan and I really, really come to respect him for what he does and what he believes in. And so let's start with, Brennan, maybe you can say hello to everybody. Where are you from and what's your family like?

Brennan Carson: [00:03:36] Thanks, Wing. Thanks, Kevin. Yeah, it's great, it's great to do this, absolutely. I think in your comment about sort of what's happened in 2022, it's a great opportunity to really talk about those risk elements and those, that sort of that investment trajectory. I am based outside of Toronto, but I have to tell you, when I redid my business card about three months ago, I took my address off my business card because I have clients in every prairie and B.C. Province out west, and I've got clients throughout Ontario, so I kind of feel like I don't really have a home office. My office is really wherever my clients are. So it's actually kind of that's the fun. You talk about what I do for fun, my fun part of the job is that I get to see a lot of Canada all the time, and I get a chance to see clients and travel to different cities around Canada and really talk about what's going on. And I think it's also what makes it interesting is that when you are in, when I'm in Saskatchewan and everybody's talking about farming, when I'm in Alberta and everybody's talking about oil and gas, when I'm in B.C. and everybody's talking about immigration and sort of the metropolitan-ization of that area, it's different conversations. So that's the fun part of my job. So yeah, I'm here outside of Toronto and I have three young adult children.

Wing Lim: [00:04:57] Same here. Yeah, right on. So you deal with a lot of professionals, I'm sure you deal with physicians. So there's a lot of mentalities out there that we can just, you know, just dibble dabble and then we'll be wealthy. And of course, now this is  really testing the hypothesis, right? So can you give us kind of a gut feel that the market has, where the market has been and where the market is going to go? Of course, nobody has the crystal ball. But can you give us a kind of a lowdown grade eight level synopsis?

Brennan Carson: [00:05:32] Well, I'll tell you this. If you think back, if we all go back in our heads, go back 12 months, the biggest factor that was driving markets - all markets, public markets, private markets, assets, fixed income - were low interest rates. We were really leveraging everything: people's personal debt, corporate debt, government debt, asset valuations, cost of capital, was all inextricably linked to low rates. One of the most valuable education sessions I ever did was a two week hedge fund course in New York City in 2006 / 2007. And, you know, say what you will about hedge funds, it's kind of this, it's sort of been whitewashed, the concept of a hedge fund. Some people think of it as the risky guys. I think of it as hedging away risk in certain investment classes. That's the way it should be done properly. But ultimately, a really good hedge fund understands the driving risk behind an investment. And so if we go back and think about personal residential real estate, if we think about the fixed income market, we think about technology stocks, which are classified as long duration, which is I got revenue now, but really I'm banking on that company being worth more down the road. Everything was connected to low interest rates. So when you get a situation of a whole bunch of printed money, and the velocity of money - which is a key metric for the economy - so when the the velocity of money slows down, the volume of money goes up. Everything is tied to low interest rates. So the greatest risk management tool that we applied to client portfolios a year ago was to say, all right, interest rates are going up. We don't know whether this is going to be a meteoric rise or a slow and steady rise, although I think we all could have realized that they held rates too low, too long. How do we mitigate our exposure to low interest rates changing into more of a normalization of interest rates? So really, you think of everything that's happened in 2022. Stocks are down, I mean, the US market's down 16, 17, 18%. Canadian Bond Index, which was supposed to be a hedge against equity risk, is down 9, 10% and everybody's house in Canada is down somewhere between 5 and 15%. It's all linked to one thing. And so that really is the theme going into 2023, which is how are we going to now adjust to where rates are? How is it going to affect different businesses? How is it going to affect different assets?

Wing Lim: [00:08:31] Mm hmm. Well, that's really a good recap. So based on the interest rate, of course, we just went up to overnight rate of 4.7% now, more like to what it was normal. But for every everyday Joe Schmo mom and pop with some portfolio in the public markets, so how is that going to impact everybody's performance, stocks versus bonds, fixed income versus all that?

Brennan Carson: [00:08:58] Well, let's just talk about, let's talk about stocks in general. And I don't necessarily even want to talk about stocks per se. Let's talk about operating businesses, because as a colleague of mine wrote a great paper and it was posted on LinkedIn a couple of weeks ago, he said the market is not the public stock market. The market is operating businesses, it's the economy. So whether you're investing in a private business, a startup, a publicly traded company, if you're investing in the economy, you're investing in operating businesses, things that generate GDP. So when I think about 2023 and this sort of adjustment to higher interest rates and I think about how it's going to affect operating companies, I think let's think about some of the inputs into net earnings, profit margins of an operating company. So cost of capital. All right, so if I'm doing a balance sheet analysis on a company, I got to think, all right, what kind of debt are they carrying on that? What interest coverage do they have? Do they have cash flow to meet their debt? Is their debt structured as short term floating or long term fixed? So even how they build their balance sheet and how they manage their liabilities. That's going to be a factor when we start thinking about those that would have an ability to adjust to higher rates better than others. Think about wage inflation. It isn't just inflation like the goods cost more, which of course is related to trade, it's related to a lot of other issues. Think about wage inflation, and I'm just going to pick on UPS or Starbucks. UPS and Starbucks are both facing significant rebirth of a unionization push, safety of employment wages. Well, all of a sudden, if you now your human resource input into your PNL now goes up 25 or 30% because you have wage inflation, it dynamically changes your ability to have profits at the bottom line. I was talking with actually with a client today and, you know, runs an operating business, manufacturing, pretty blue collar, you know, 40 people, not a big operation. And he says, my wage expense just went up 25 to 30%. So all of a sudden, if your margins were 35, they're now 5. Right? That, I mean, that's your biggest input cost in a lot of these operating companies and I'm not even beginning to touch the input cost due to trade issues and the sort of decentralization of of manufacturing and labor and trade, but just wage inflation. So when I look at 2023. I think there's going to be a pretty good split between winners and losers. So, you know, if you think about the concept of owning an index fund, you know, I own the S&P 500. I own 500 operating businesses in the SNP in the US. 500 biggest, most well established public companies. So the index itself, it may go up 5, 8, 10% next year. I certainly don't think we're in for the most dramatic rebound to a bull market in the history. I don't sort of see that in the cards. What I see is there are going to be 200 of those companies that can pass inflation through to their customers, that can manage their margins, they can manage their cost of capital, their debt. They can continue to generate free cash flow, which is the bee's knees of running an operating company, and they'll be just fine. And then there will be 200 on the other side that don't. So next year, in my mind, it's, I really believe this is a year of quality over quantity. Find those that are driving free cash flow, paying dividends, maintaining margins. I'm going to stick with those businesses for the next 2 or 3 years, all day, every day.

Wing Lim: [00:13:11] Right on. So even this, when you talk about input cost of, let's say, wage and all that, it applies to medical business. A lot of clinics in Alberta are actually folding and doctors are quitting in a record number because everything's going up, the wages ceiling and actually crashing down. And so it's not just Alberta phenomenon, right, it applies to everybody. So it's going into 2023, I agree. Some will make it, a lot won't. So for a lot of people who want to pick and choose, would it be if people have no time, I just want to pick an index fund, would that be? What would be your advice for those stocks?

Brennan Carson: [00:13:48] Look, I mean, people choose an index fund for two reasons. One, it's very accessible, low cost. I can literally pick an index on my phone and be done with it in about 5 seconds. So very accessible, very easy, very inexpensive. Number two, the statistics are not going to lie. 80 to 90% of actively managed US equity portfolios, mutual funds or pooled funds of any kind tend to underperform over a cycle of the market three, four or five years. So if I want my odds of at least matching the index and making it easy on myself, I'm going to buy an ETF. So really, there's two ways to generate Alpha, the concept of outperforming an index, in my mind. This is this is 23 years of being an analyst and being a portfolio manager. Number one, you run a more focused portfolio. One of the reasons mathematically, and I won't get into the math, although, you know, my colleagues and I all come from calculus and physics backgrounds, so we love this kind of stuff. I mean, literally, you know, on a Friday night pulling out an Excel spreadsheet. I know that sounds weird, but that sounds fun to us. If you do the math of running a 80 to 100 stock equity portfolio, just by the math of the amount of stocks that you're trying to trade, that you're trying to follow and the amount you're putting into each individual stock, just in it's, just in its mathematical composition, very hard to outperform an index just by that math alone. So I've always believed if you want to generate outperformance, you have a focused portfolio. So for me, that's, you know, 20 to 35 stocks. Number two, you should have a specific style to that portfolio. And this is generally what I find the weakness in a Do It Yourselfer, is I own some oil and gas, I own some blue chip, I own some utilities, I own some speculative, I own some tech. What's the style of that portfolio? I get it, there's some diversification, you're in different industries. You've got sort of different profile of kind of companies that you're buying. But you're just going to end up in the middle. You know, if you add five different vertices together, you end up in the middle. So in my mind, a focus portfolio with a specific style. And in my mind, that style going through the next couple of years is more of a value dividend quality than it is betting on technology and more speculative long duration companies. You know, everybody rushed in to cloud storage because, well, we all need the cloud. Okay, well, we don't need 32 companies with cloud services. Some of those aren't going to survive. You know, you talk about businesses that aren't going to survive. It's just too many players. I'm not even getting into the 3000 people offering crypto. Right? It becomes a crowded space where really maybe there wasn't room for any to begin with. So that to me, that to me is both a philosophy, regardless of what market condition we're in, right? Focused concentrated portfolio with a very specific style. That's the way to generate outperformance if you are going to choose something other than buying the index. But as I said, my view of the index is we'll probably have a decently positive return in 2023. But you're going to be weighed down by the fact that half the stocks you own have deteriorating profit margins. And so I would prefer, in a market like, that to cut out the stuff where I know - and again, we have we're more of a data focused firm, I track profit margins. I can, at a snap of a finger, I can look at the profit margins of 2500 US stocks - I'm not going to bother with those next year. Why bother? I don't need to own those. If I can choose to not own them, I'm not going to own them.

Wing Lim: [00:18:07] That's a great perspective. So, Kevin, you have a question?

Kevin Mailo: [00:18:09] Yeah. Yeah. So I can tell you already, Brennan, I definitely feel like we're just going to keep asking you tons and tons of questions and which what I'm really getting at is we got to get you back on for another webinar or a podcast episode for sure, because we're loving it. And I know those of us out there who are listening to this are, like, going to be all ears on this sort of perspective when it comes to the market. So I want to shift a little bit. So Physician Empowerment is more than just money. It's about building better lives for our physician clients, right? And that's also behind why we founded the Empowerment Office Corp as well, is to build better lives for physicians. And a lot of physicians, I think, struggle with micromanaging. And they work 70, 80 hours in a workweek and then they step in and try to manage their portfolio. And I see it done poorly in a lot of cases. I've got colleagues, we've got physician clients who who've lost. And so can you give us some insight into your client base? And why they might choose you besides just the numbers, right? Because, again, one of the things that we talk about in Physician Empowerment is learning to delegate. Not abdicate, as Wing says, but learning to delegate to quality professionals who, it's not just about making money it's also about building a better life. Right? Because as the market slides or goes through its ups and downs, you know, do you really want to be watching your phone go off at 11:00 at night, worried about your portfolio, your ability to retire, that sort of thing? So do you want to just provide some insights into your clients and why they go with a portfolio manager? And share as much as you as you feel comfortable in terms of net worth or geographic spread or background, whether they're business owners or professionals or whatever. I would personally love to hear a little bit more about who chooses a high level portfolio manager such as yourself.

Brennan Carson: [00:20:06] All right. So as you're asking that multifaceted question...

Kevin Mailo: [00:20:08] Yes, I just keep going, which is why we're going to have to get you back on.

Brennan Carson: [00:20:11] I quickly jotted down five points. So I will address those five points. Number one. The most important tool we have when we work with clients is the discovery document. There's no close second to the importance of a discovery document. So just to give you some perspective, I have clients that charge me with the responsibility of just finding them specific investment solutions, public or private market. I have some people call me up, Brennan, I'm looking for this. Can you get me into that? Yes. And that's another point, which is access. But we can circle around back to that. And I've got clients who say, Brennan, you're literally my family's CFO. I want you to talk about tax, estate planning, insurance, financial planning, risks, intergenerational wealth issues, even holistic wealth concepts, charitable giving. And we really run the gamut all the way through. But that starts with that discovery document. And to your point, Kevin, and this is what I've always appreciated about the platform that you and Wing are building, which is it is so much more than just, Hey, let's make a dollar on a dollar.

Kevin Mailo: [00:21:25] Oh, without question. Without question.

Brennan Carson: [00:21:27] So the beautiful thing about a properly constructed discovery process is you really invariably unearth the strengths, the weaknesses and the risks that exist within an individual sort of wealth profile. Sometimes it's emotional risk, sometimes it's financial risk. You have family issues, you have succession issues, you have health issues. So that, to me is, you know, that is the sort of the gold standard of establishing a strong roadmap. And that to me is, again, that's, the discovery document is the input. The roadmap is the outcome. And that document allows you to establish a much deeper and stronger relationship with that - I'll call it a wealth quarterback - than anything else. So this isn't about, Hey, my performance is great, or Hey, I've got a really nice marketing campaign. In fact, the research is compelling. People do not fire an adviser for performance. It is the fourth ranked reason why people fire or hire an adviser. Trust, communication and transparency are one, two and three. So that should always be the most important inputs into the equation of working with someone who you really want to both empower, to use your word and to engage and trust into that relationship of someone that, yes, you can collaborate with that person. I do have some clients who say, Brennan, here's my dollar, invest it. Tell me in a year how I'm doing. And they're very hands off and that's fine. But I don't let my clients get off easy. It's not just, Hey, Brennan, trust, you know, I trust you. Go with that dollar. I get into situations where I'm meeting with a couple. One person has been primarily responsible for the finances. I want both partners of that couple to be involved in that discovery process and to know who I am and what I'm doing and why I'm doing it. I don't want to have, as I have in the past, that conversation with a widowed spouse who does not know where to start. Who doesn't know where the will is, who doesn't know anything about finance, doesn't know how the bills are being paid. That's not really a great partnership.

Kevin Mailo: [00:23:57] Yeah, sorry to interrupt, but yeah, that's exactly what we say at Physician Empowerment, wealth creation is a team sport. And we've got our annual national conference coming up in May, and we really encourage the non physician spouse to come. And understand physician finance at the same level as the doctor in the household. So I just, I just wanted to tell you, I'm loving what you're saying. Keep going. Keep going.

Brennan Carson: [00:24:19] So the second part of that, so discovery document really building a strong plan and a roadmap. And I think that's something that that makes people sleep better at night. I mean, that's, at the end of the day, the emotional risk often trumps the financial risk. And frankly, if you're a high income earner, that should be as important as the financial objective. It's the emotional, which is I sleep better knowing that somebody is taking care of my tax, somebody is taking care of my insurance needs, somebody taking care of my family. Really in sort of a broad context, someone's really working with me on that. Then the other part of it is really looking at wealth, Kevin. It's, look, nobody - very few, I won't say nobody - very few people get wealthy picking stocks, you know, like, well, Warren Buffett is worth whatever, gazillion dollars. Warren Buffett invests in businesses that are well-run that he's going to hold for a long time. There's no flipping stocks. Right? So just about everybody, if you've built wealth, you've owned great assets, you own great real estate, you own a great business. So wealth is really, I think it becomes, I think we get so inundated with fund performance and stock news. As I said, the private equity market in this world is ten times the size of the public market.

Kevin Mailo: [00:25:44] Yeah, I know. I know. And people don't realize that, right?

Brennan Carson: [00:25:48] There's close to - it depends on the day - but, you know, 70 or $80 trillion in the public market. And there is ten times that, the value of the operating businesses that don't trade on the market.

Kevin Mailo: [00:26:02] Yeah, they don't have an IPO or a real estate project or whatever. Absolutely. Absolutely. This is going to be another, I'm just, there's going to be another thing we're going to be talking about at the conference is trying to open positions up to a much bigger world that goes beyond public markets.

Brennan Carson: [00:26:18] Yeah. So we get it, we get fooled into this, Literally, my wealth is dictated by how the TSX and the S&P 500 do. That's, I mean, there's just, you know, I can say this because I'm a portfolio manager and I don't sell equity funds for a living. You know, it's just, that's just not the way wealth is managed. And so the byproduct of that discovery document is understanding all the elements of wealth. And one little tiny sliver of it is maybe an exposure that you have to the public markets. But again, your real estate, your health, your insurance, all those other elements all plug into that. And so that is so important. And that's, again, a big part of the practice. So I manage, I manage about 60 families, high net worth families myself. Probably the average client is 2 to 2 and a half million. And with a lot of those, it is far more than just, hey, manage my money. It is so much more about building all of this. So that's, I know I said five, five points. We're kind of two or three into it. So the other one really, then, again through that discovery document, is the risk component. We've touched on that a little bit already. You know, I have a client who's a general contractor. He runs an extremely good business. You know, as you probably all imagine, it's been a great environment. People have stayed home. They want their houses renovated. And I looked at him and I said, you know what your greatest risk is? I said, it's not whether I make you 5% or 8% or 2%. It's your health.

Kevin Mailo: [00:28:00] Yeah, you are your business.

Brennan Carson: [00:28:02] If you can't use your hands and you're not on site, all of your goodwill equity is gone. You're, you know, that's it.

Kevin Mailo: [00:28:10] Physicians are no different. Physicians are no different. You are your most important investment. It's something we teach. Absolutely. Absolutely.

Brennan Carson: [00:28:18] So take care of that and take care of that isn't just making sure you have a safe work environment or that you get good rest, your site is good, all those kind of things. But it's also all right, do you have insurance to cover what happens if something happens to you? So all of those elements and I think, you know, you talk about the fact that why people do or don't work with an advisor. I think they work with an advisor who realizes that A, the best interest is the best interest of the client. That's really what's driving decision making. And B, that they care about something beyond whether you're going to buy whatever fund you want to stick in front of them. I'm really, I'm proud that my team is built as an independent. And this is not to throw shade on on the banks or the big mutual fund companies. But it's really important to maintain that independent, objective viewpoint in order to effectively address your client needs.

Wing Lim: [00:29:21] So two points I want to respond to Brennan's comments. Number one, it's no different than medicine. People like to Google, consult Dr. Google, and piecemeal their health. Right. We're in primary care, we understand that, how important it is to have that family physician. Right? So having that trusted figure that is your quarterback, you're using finance term, trying to piece everything together. Second thing is, that's what we started Empowerment Office corp, is that we believe in this whole process - we call it the roadmap process - and we help people break down all the facet of that for each aspect of it to customize it for everyone. So this is awesome. Now, sorry, I have a hard stop, so I'll leave and Kevin would continue. All right.

Brennan Carson: [00:30:06] All right. Thanks, Wing.

Wing Lim: [00:30:08] Thank you, guys.

Kevin Mailo: [00:30:09] All right, so Wing's going to sign off, but I absolutely love this topic because you're getting on all the right points, Brennan, in terms of looking holistically at our lives. One of the things that I often reflect on is that real wealth is peace of mind. And I think that, at least for some people, portfolio management offers that in addition to all the other things we outsource in our lives, whether it's property management, clinic management, great lawyers or accountants, people who manage us, who are the people you work with to build wealth for your clients?

Brennan Carson: [00:30:41] You mean in terms of the, kind of the--

Kevin Mailo: [00:30:44] Yeah. Explain it, right, or explain your process, if you will, if you have time to just go into it, because there are going to be a lot of physicians listening to this whom this is going to be very new for. Right. It's just, you know, how do you sit down... because they have their own network. Maybe they have an accountant or a tax lawyer. They have insurance policies already. Who do you work with? How do you coordinate? Do you do a lot of tax planning?

Brennan Carson: [00:31:08] So in terms of sort of that broader wealth concept, Kevin, in terms of kind of putting that team together, I had a great mentor in this space who was a wealth manager for a number of, you know, wealthy families, and they said, you know, don't try to push someone on someone. You know, in other words, Oh, I've got an estate lawyer, you have to work with them, you know, fire whoever you've been working with. So first of all, you do have to have a quarterback. Doesn't have to be me, but there has to be someone that is that central resource to access and have the ability to coordinate the team and the documents and the roadmap. So that's important. You have to have that. And obviously that's a huge part of what you guys are trying to do in terms of really focusing that broader concept of bringing that together. But my approach has always been, I may be the hub, but the spokes are specialists, people who are really good at what they do. And I say that in the wealth space and I say that in the investment space. I may have 23 years of managing equities and some alternatives, but if I'm looking for a private debt portfolio, a mortgage portfolio, an international long shore hedge fund, I don't do that. But I can bring my clients those professionals who are laser focused in that particular solution. So I think of myself on a wealth management point of view as a generalist. I'm an investment specialist, but I'm a wealth generalist. So I can uncover tax deficiencies, I can understand, I can uncover insurance shortcomings, talk about generational wealth issues. In my first life, I actually worked in the not for profit sector. So I, I actually have a background in charitable giving and charitable planning as well. And I still do quite a bit of that work as a volunteer and a board member now. So again, it's if someone comes to the table and they say, look, I've had a, I've had a tax accountant working with me for 20 years, I trust them. They're an important part of my planning. That's great. That's great. So let's not get into an arguing match about who's right or who's wrong about things. Let's set down at the table. I think you want your team to be open minded that we're better together than we are all trying to yap in our client's ear about what they should do. That's really ultimately ends up being the worst of all situations. Well my accountant says I should take out an insurance policy, my investment guy says I shouldn't. You know, my neighbor, my golf buddy, says that I should like, No.

Kevin Mailo: [00:33:54] Oh, it's a mess. I mean, it's not it's not going to work for somebody's health either. You know what I mean?

Brennan Carson: [00:34:00] Yeah, well, I'm sure. Look, I'm not in your business, but I'm sure the notion of Googling what's wrong with my sore right eye or my...

Kevin Mailo: [00:34:07] I am deciding whether to take out my colon or not.

Brennan Carson: [00:34:12] Yeah, I just heard that we should all be putting Head and Shoulders on our face to cure acne the other day. So, yeah, you know, like--

Kevin Mailo: [00:34:19] You know what I mean? It's not useful if it's 100 different answers.

Brennan Carson: [00:34:23] Right. So, absolutely. The only thing I really stress in that situation, I used to survey my clients about who their professionals were, not to really, not to really judge one or the other, but the greatest partners we work with in that well space, whether they're a tax person, a financial management person, insurance person, estate lawyer, is are they proactive and strategic? I don't need someone to file my taxes. I don't need someone who files my medical professional corp papers. I need someone that says, Okay, Dr. Jones - sorry, I always use that example.

Kevin Mailo: [00:35:04] No, that's fine.

Brennan Carson: [00:35:04] I love Indiana Jones. Dr. Jones, okay, what's your tax advisor telling you? Are they are they telling you to do a strip or are they telling you to do a freeze or are they telling you to add your kids in? Are they suggesting you do, you know, an IFA to create an insurance solution to lever more money, you know, money coming out of the corp? And look, I see this a lot. I see - and in fact, I had breakfast with a a medical doctor who's a client of mine this morning - and she, like so many physicians, get to that stage in her career, she's in her mid-late fifties, where almost all of her investable assets are in tax deferred vehicles. They're in her PC and they're in her RSP. And so when I do a wealth analysis, they say, Oh, by the way, you owe the government $1,000,000. Don't pretend that you have 3 million because you don't. The government owns a million of that 3 million sitting in your tax deferred vehicles. So this is a bit of a circuitous way to answer your question, Kevin, but you want to meet the team. You want to make sure the team wants to work together and can work together. And you want to have members of that team that aren't just going to just kind of rinse and repeat. They are going to bring solutions to the table. So, and I think that's that conversation. And if there's a sub out and a sub in, again, I don't have a hidden agenda to push any professional or any strategy onto anybody. But if my clients are going to be well taken care of, I want them to be working with great people who care as passionately about them and their and their future as I do.

Kevin Mailo: [00:36:47] Absolutely. Listen, I can't believe we've come up on nearly 40 minutes. We should probably wrap up and move to the question portion.

Brennan Carson: [00:36:57] I'm going to add one more thing, Kevin.

Kevin Mailo: [00:36:59] Go, go, go, go. No, no, I love it. Go.

Brennan Carson: [00:37:00] I'm going to add one more thing.

Kevin Mailo: [00:37:01] I'm loving it all. Go.

Brennan Carson: [00:37:02] You talk about - sorry, part of your question was why would you work with a professional portfolio manager? Why would you - so besides discovery, risk analysis, proactive, strategic, all that things - when it comes to not just investments, but this is certainly more in the investment space than it is in sort of the other wealth space, is access. If I go to Wealthsimple, I cannot buy a private debt portfolio. I cannot get a private real estate portfolio. I can't get private equity. So if we're all trying to aspire to, I mean, you think about CPP or Ontario teachers, some of the best managed pension funds in the world, aren't we really all aspiring to have this portfolio that just keeps making 7 and a half or 8% every year with very little volatility? Well, that portfolio looks very different than I can get on my do it yourself platform. So I put, when I launched, when I left and I built my own independent practice four years ago, the first thing I wrote in my notebook - and I am a note taker exceptional - is the democratization of diversification. Let's break down the barriers of who has access to some of these really incredible portfolios that add value, both in return and in risk management to clients.

Kevin Mailo: [00:38:35] I love that. I love that. Brennan, I just want to thank you for coming on like you did tonight, especially on such short notice. This was just amazing, right? I mean, these are the insights that people need to hear. I certainly needed to hear this. And it was eye opening for me just hearing about how the private markets are ten times larger than the public ones. And yet everybody's following what the public markets are doing. So I want to thank you, Brennan, for being here tonight and for those of you that have questions, by all means, reach out to us and we're definitely going to be getting Brennan back on to the show. So with that being said, we're going to wrap up and step into a couple of questions because we do have some people here who joined the live webinar.

Kevin Mailo: [00:39:19] Thank you so much for listening to the Physician Empowerment Podcast. If you're ready to take those next steps in transforming your practice, finances or personal well-being, then come and join us at PhysEmpowerment.ca - P H Y S Empowerment dot ca - to learn more about how we can help. If today's episode resonated with you, I'd really appreciate it if you would share our podcast with a colleague or friend and head over to Apple Podcasts to give us a five star rating and review. If you've got feedback, questions, or suggestions for future episode topics, we'd love to hear from you. If you want to join us and be interviewed and share some of your story, we'd absolutely love that as well. Please send me an email at [email protected]. Thank you again for listening. Bye.

Dr. Kevin Mailo welcomes physician and beyond MD podcast host Dr. Yatin Chadha to Physician Empowerment to talk about finance for physicians. Yatin Chada’s podcast is well-known and he has interviewed a wide and notable range of physicians and finance industry professionals since beyond MD launched in 2020.

Kevin Mailo shares the news that Yatin Chadha’s podcast reached the Top 50 of finance podcasts on the Apple Canadian Business podcast. He asks Yatin about some of his more memorable episodes and Yatin shares several, including one with Kevin himself, and other episodes featuring Jamie Golombek and Joe Bakish. He highlights what he learned from each of them. 

In this episode, Kevin Mailo and guest Yatin Chadha discuss the finance industry through the lens of topics Yatin has explored with his podcast guests. They talk about how to build financial security, real estate as a great investment, diversifying portfolios, generating passive income, and dividend stocks. Kevin and Yatin break down what is important for physicians to consider when pondering their financial futures.

About Dr. Yatin Chadha

Dr. Yatin Chadha, MD is a Diagnostic Radiology Specialist in San Diego, CA and has over 13 years of experience in the medical field. He graduated from UNIVERSITY OF BRITISH COLUMBIA / FACULTY OF EDUCATION in 2010.

Dr. Chadha launched the beyond MD podcast in 2020, which focuses on financial literacy. The content is provided by subject experts, but is steered by him to ensure relevance to healthcare professionals in Canada. There is a frequent focus on professional corporations.

He believes that stress related to personal finance can lead to physician burnout. Dr. Chadha’s mission is to change this. He has learned a lot along the way and wants others to be more prepared than he was. His aim is to help other healthcare professionals navigate personal finance such that this area becomes enjoyable, rewarding, and eventually automatic such that physicians are able to dedicate more time to the things that matter most to them.

Resources Discussed in this Episode:

• Save the Date for May 6-7, 2023 in Toronto
• Dr. Yatin Chadha on LinkedIn
• “beyond MD” podcast 
• “Real Estate Investing - a Physician’s perspective” beyond MD episode with Kevin Mailo
• “RRSPs for incorporated small business owners with Tim Cestnick” beyond MD episode
• “Holding Companies with Ali Spinner” beyond MD episode
• “Corporate investments - optimization and taxation with Jamie Golombek” beyond MD episode
• “Alternative Investments with Joe Bakish” beyond MD episode

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Physician Empowerment: website | facebook | linkedin

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Transcript

Kevin Mailo: [00:00:00] Hi, I'm Dr. Kevin Mailo and you're listening to the Physician Empowerment Podcast. At Physician Empowerment, we're focused on transforming the lives of Canadian physicians through education in finance, practice transformation, wellness and leadership. After you've listened to today's episode, I encourage you to visit us at PhysEmpowerment.ca, that's PHYS empowerment.ca, to learn more about the many resources we have to help you make that change in your own life, practice and personal finances. Now on to today's episode.

Kevin Mailo: [00:00:35] Hi, everyone. It's Kevin Mailo here, one of the co-hosts of the Physician Empowerment Podcast. And today I am joined by the one and only truly amazing Dr. Yatin Chadha. And for those of you that haven't heard Yatin speak or listen to his podcast, you can find him online at the Beyond MD podcast. And it's truly amazing. And Yatin, you had a big milestone. I'm going to talk about you for a couple of minutes and then I'll let you talk about yourself. But let me do some bragging for you. But you broke the top, you broke the top 50 finance podcast. That's not medical podcasts. You broke the top 50. And was it...?

Yatin Chadha: [00:01:12] You know, yeah, it was the, I think it was the Apple Canadian Business podcast. But Kevin, I can tell you what, you're so kind to mention that, but it gave me, it gave me newfound respect, though, for the people who just continue at this and are actually able to stay there. Because I tell you what, I do rely a lot of my guests for the content. Now I am producing a few more solo episodes, but it is really hard once you get there, it's really hard to stay there.

Kevin Mailo: [00:01:42] Yeah, trust me, I've done it for years, not just this podcast, but obviously the other one as well. Yeah, there is a lot there.

Yatin Chadha: [00:01:49] Yeah. Yeah. It just takes, and I have a lot of respect for people who have been doing this for years and like with anything in life, it's a journey, not a marathon, right? Just takes a lot of time and effort.

Kevin Mailo: [00:02:00] Make sure, make sure you're doing what you love, right? I think that rule applies to all of us in our lives. Like, if we're not loving it, why are we doing it? Life's got to be more than just a trudge. It truly does, you know? So, you know, you got this incredible podcast. Do you have guests now coming to you? Like, are you still having to source guests or are you big enough now where everybody sort of says, Oh, can I be on the show?

Yatin Chadha: [00:02:25] It's definitely getting to that now. And I can tell you, I think this was around episode seven or eight - I'm trying to think, episode seven - it was Tim Cestnick who agreed to come on, and I can tell you at that point in the early days, I remember that specific episode. Kevin, I was scrambling to find a guest because I told myself, I have to put something out there every four weeks, stay consistent, and then thank goodness Tim Cestnik messaged me back the same day and he was just like, Yeah, I'd love to come on. And I was just like, Thank you. Because without him I would have been struggling. But now times have changed. I mean, now I've probably recorded episodes to, all the way out through January, February, and a lot of requests, a lot of requests now to come on. But it's a mix, right? Because for me, my goal is to find who I think are going to be the right people to come on and present information in an articulate way and hopefully less biased way. So it's a bit of a mix, but certainly a lot of demand from guests now.

Kevin Mailo: [00:03:23] And where do you see your audience now? I mean, we talk about this being Canadian physicians, but I can see you being so much bigger than that. Do you have some sense of your audience beyond Canadian physicians? I know lots of us talk about you and hold you in enormous esteem, but I have a feeling this is now expanded beyond that.

Yatin Chadha: [00:03:43] Well, thank you. That's very kind of you. Canadian physicians are certainly the top audience, other health care professionals, so dentists, pharmacists, I do get messages from time to time. But then there are a lot of people in the in the finance industry as well, because one goal that I've had is I want to be touching on topics that are not only relevant or maybe are a little bit beyond what people may be talking to from day to day, like tax free savings accounts and RRSPs. I'm trying to just take it one level further - and not, this is not to say that more complicated is sexy or better, but I think there are a lot of things that we need to be better versed in and more aware of. And so that's my goal. And I think because of that focus, it naturally gravitates to people in the financial industry as well. I think they find the content interesting. So I do have a lot of people reaching out from from that part as well.

Kevin Mailo: [00:04:38] You know, one of the central teachings that we do at Physician Empowerment is talking about the notion of your why. Right? And getting down to what motivates you to build financial security and create wealth. The other side to this is learning to ask your own questions. Like, you know, we sit there, you know, always talking about looking for the answers, but how do you know what answer you need if you don't even know the question to be asking? And these are questions of, questions of ourselves, of our lives, of our loved ones, but even within our careers. And then taking that further is, you know, sitting down with an insurance specialist, you know, a tax lawyer, sitting down with an investment advisor, looking at the markets, you don't even know what questions to be asking. Like, you know, I struggled with that with my accountant in the early years of my practice, like just not knowing enough about the Canadian tax system at a corporate or personal level in order to ask educated questions of my accountant. Do you know what I mean?

Yatin Chadha: [00:05:37] 100%.

Kevin Mailo: [00:05:38] You know, it's up to us, I think, with sophisticated tax or financial picture, to have enough base knowledge in order to step into these conversations with trained professionals, our consultants, if you want to call them that, and ask them relevant questions. Right? Because if it's poor data in, it's going to be poor data out, is been my own personal experience.

Yatin Chadha: [00:06:02] Yeah, and I think with that summary, Kevin, I think you have encapsulated the main goal of the podcast, and that is to make people feel comfortable enough on a broad range of topics so that they feel comfortable asking the right questions. And, and the truth is, I've always had in the back of my mind that maybe we should have more of this material in our medical training. But then after thinking about that again, I think with the information people have to learn now in medical school and residency, it is really hard to incorporate it. And so I do think the onus is on us as a community to continue to talk openly about these topics and hopefully motivate our colleagues to just be avid learners and really curious about this content. And I think that's the right step forward.

Kevin Mailo: [00:06:45] And the other big, big side to this is practice management, right? I mean, we started teaching practice management at Physician Empowerment because we realized like nobody was getting educated on this stuff. And again, like, you know, going back to your point, like rightly so, in a sense, like there's already so much medicine to learn in that 5 to 10 years of training that that someone goes through like to learn their craft. Do we really, honestly have time to be taking deep dives into finance and practice management and tax planning and all these sorts of things? But I think it speaks to the need for lifelong learning in these areas, and...

Yatin Chadha: [00:07:25] Absolutely.

Kevin Mailo: [00:07:26] ... realizing that our finances affect our practice, our finances affect our personal well-being. Right? And so having a handle on those, not a perfect handle, but a good approach and a solid financial base, allows us to practice our best medicine, allows us to live our best personal lives, which I think is so important for Canadian physicians. In my opinion, that's what we deserve across the profession. I see doctors constantly working extra hours to serve their patients and serve the community, but we should be able to do that knowing that our financial futures are secure.

Yatin Chadha: [00:08:01] Yeah, I totally agree.

Kevin Mailo: [00:08:02] So talk to us about some of your memorable moments along the Beyond MD podcast journey. What was it like in the early days? What is it like now and how long have you been at it now? Is it two years now, Yatin?

Yatin Chadha: [00:08:15] Yeah. So it started September 2020. So just over two years now.

Kevin Mailo: [00:08:19] Wow, it went by so quickly I felt like we talked for the first time yesterday, but it's been two years that we've been talking because I was on one of your earliest episodes, right?

Yatin Chadha: [00:08:28] Yeah. Yeah. Kevin, so you were on my season one finale. We did an introduction to real estate, and I know you wanted to pick my brain on some of the most popular episodes ever. So in fact, your episode, that was episode number 16, that that is one that did help the podcast jump to the next level. So thank you for that because that was a great--

Kevin Mailo: [00:08:50] -- Oh, lumbar puncture night --

Yatin Chadha: [00:08:51] -- talking about real estate--

Kevin Mailo: [00:08:51] -- if anybody wants to know that one, you can just listen to Yatin's podcast. Lumbar puncture night. That was a lot of fun.

Yatin Chadha: [00:08:58] Yeah. Yeah. So, your your episode is quite memorable. And I have to say, it wouldn't have been possible without my first guest, Ali Spinner, who was an accountant at Crowe Soberman. She's based in Toronto, and she helped me produce two incredible episodes, one on basics of corporations and the other one on holding companies. Her episode on holding companies, I mean, up until recently, that was the most popular episode in terms of like the one week and one month metrics. And then and then early on, just to have a name like Jamie Golombek.

Kevin Mailo: [00:09:28] Oh, wow. I know. I remember when I saw that, I was like, Wow, Jamie Golombek went on the show.

Yatin Chadha: [00:09:33] To have Jamie Golombek on the show, that was huge because I was literally, you know, I had a few downloads up until that point. And then that week when I released his episode, it was like every two days I was getting, I was hitting new milestones. Just because he was on, he was blasting it around. And so I'm very, very grateful to that, to him for doing that.

Kevin Mailo: [00:09:53] Wow. Isn't that awesome? Isn't that absolutely awesome? And then what sort of things have you learned along the way? Right? Like, what have you learned about the finance industry that Canadian physicians who are listening to today's episode should hear about? Because I certainly have found this process to be eye opening through Physician Empowerment because we engage with, we get a lot of outreach from the finance industry, and by and large keep them at arm's length. But tell us what have you learned about the finance industry?

Yatin Chadha: [00:10:23] Yeah, I think some of the notions that our community had about the finance industry in terms of maybe doctors at times due to our income and our relative lack of knowledge in this area, we become a bit of a target. I will say that there are people out there who do get very interested in seeing a product based on finance. So the podcast that's being put out by a physician. And so I will get a lot of people reaching out and, and you know what? Now that I'm becoming more comfortable with the content, I think I do know the questions to ask, and I do know when to maybe challenge somebody on a point. And so yes, I think that that notion that people have, for sure, it's correct and you have to, I think that's point one is that's all the more reason to be well versed in this material so that you know the right questions to ask and you know how to protect yourself and make sure you're getting the right product and served in the right way. So that's one thing I've learned. The other thing, though, is I've learned how much there is to learn about about finance. When I first started, the talk was really just about investing in a TFSA, investing in an RRSP, maybe buying an ETF. But when we look at what's happened, Kevin, especially since February, it's really just been kind of all downhill this year in the markets, right?

Kevin Mailo: [00:11:43] Yeah, that was eye opening.

Yatin Chadha: [00:11:45] Yeah, it's just been, it's been crazy. And you look at the history, you know, most bear markets are, are fairly long, but I think we're kind of hitting the average length of what historically most bear markets have been, and you know just to to endure something like this. It's also taught me, well if you have the right knowledge base, you can invest in different instruments and different ways such that those investments will not totally correlate and move the same direction as the stock market, right? So this is a notion that I had no idea about, but it's the concept of uncorrelated returns. And that's why--

Kevin Mailo: [00:12:21] -- I like that. Wow, goodness--

Yatin Chadha: [00:12:23] --I think I encourage everybody to read about this a little bit. And so just for people who may not be as familiar with the concept, it's if two types of investments have a correlation of one, that means they generally tend to move in the same direction at the same time and often by a similar magnitude. But you want to make sure that, I think most people would feel comfortable if their portfolios were truly diversified. And so you want to be investing in things that are not always correlated with stocks. And traditionally, that's why a mix of stocks and bonds has worked well. But this year, with inflation, the stock bond 60/40 mix has not worked well at all. It's just been brutal for bonds. So I think that's why it begs the question, do you go beyond that? And I think it's at least worth learning beyond that. And so one of my more recent episodes, I hosted a very knowledgeable, savvy financial planner. His name is Joe Bakish, and he talked about alternative assets. And so I know this is an area that some people may see. They may raise an eyebrow and be like, well, there's a lot of costs. But I always tell people, at least learn about it and then you kind of know.

Kevin Mailo: [00:13:33] Oh be aware.

Yatin Chadha: [00:13:34] Yeah. Be aware.

Kevin Mailo: [00:13:35] Be aware. You've got nothing to lose by being aware of a different opportunity or different asset class.

Yatin Chadha: [00:13:41] Yeah. And one thing I'll say is I never like to give advice because to each their own. Personal finance is personal. And, but now what I've started to do is small parts of my portfolio, now that I've been investing for 4 to 5 years, small parts, I am starting to incorporate some of these alternatives that are truly uncorrelated from the markets. And this can be more an offline discussion if people want to reach out. I never give advice. I'm not certified, I'm not a planner, but I encourage people to learn and enjoy learning.

Kevin Mailo: [00:14:11] Yeah, yeah. At Physician Empowerment, we call it CBE, continuous business education, right? Like knowing what money does in our lives and the different ways that we can use it. One thing that we always kind of harp on at our finance events - and we've got another finance conference coming up May 6 and 7, 2023 in Toronto, of course you're invited, Yatin.

Yatin Chadha: [00:14:36] I'll be there.

Kevin Mailo: [00:14:37] Yeah, I know. It means a lot when you come out.

Yatin Chadha: [00:14:40] I wouldn't miss it.

Kevin Mailo: [00:14:41] But one of the challenges that we try to encourage people to face is the notion of an income based retirement. Right? Because in my opinion, real wealth is income coming in regardless of whether you are going into work, regardless of whether you're picking up that call, that clinic, you know, doing those ORs, is money coming in through passive investments or near passive investments, right? Because nothing, you know, it's very, like unless you've got a trust fund that's churning out money, like most of the time, you're going to have to at least learn to manage your managers, whether that's a property manager or a portfolio manager. But talk to us about an income based, a truly income based existence where we are not dependent on hours worked and ideally one in which we retire and our net worth continues to climb because the income not only handles our day to day expenses, but continues to grow in value or continue to grow our asset column in value. Do you want to talk to us about what that means or what your reflections are on that?

Yatin Chadha: [00:15:47] It's such a wonderful question, Kevin, and so I'm happy to talk about my perspective on this. And first off, I think we'll hear a lot of stats out there. But I think generally speaking, most people who end up in a very good financial position in life and people have different definitions for that, whether it's a millionaire - but now when the cost of living is getting so expensive to have $1,000,000 at point X may not mean that much - but generally speaking, people who do well have multiple sources of income, and those sources of income are not necessarily tied to their day to day grind. So I was reflecting on this, and I'm a radiologist day to day. And one thing I realized was, well, wow, I have a lot of income tied to radiology. It may not all be tied to the hospital, but it's tied to extra clinic shifts that I'm doing and locums that I'm doing. And you and I have talked about this. This is a very, you know, the tendency of a lot of physicians to just start doing these extra shifts. But what I notice is that if--

Kevin Mailo: [00:16:51] -- it's easy and we know it right, and you go, Well, exactly how am I going to make that kind of money? Well, just exactly a shift. But but that's not a recipe for health and wellbeing and it's not sustainable--

Yatin Chadha: [00:17:03] -- exactly. That's my point. I realized that if I was doing this same thing all day, every day wasn't necessarily making me happy inside. And in fact, I had a few people reach out to me. These were friends who were listening to the podcast and they said, Yatin, why, some of us are asking, why are you doing this? Because you could just go and read radiology cases all day and ramp up your income. I was like, Yeah, I could do that. But deep down that would be almost stalling my personal development. That would be, that would be, in a way stalling my ability to network and and meet with people. And at the end of the day, I want, you know, and I'm not saying I'm going to monetize the podcast, but at the end of the day, you know, I want to grow and--

Kevin Mailo: [00:17:49] -- you're doing something you love--

Yatin Chadha: [00:17:50] -- exactly, but I think--

Kevin Mailo: [00:17:54] -- keep going. Keep going.

Yatin Chadha: [00:17:56] No, no, no, no, no, no, no. I keep interrupting you there. But I was going to say, I think most successful people have sources of income that are truly diversified coming from different areas. So that's one of the reasons that I started to get into real estate, for example, in the last several years. So starting in 2020, up until now, each year I have invested in one property and now, now as I'm learning more about real estate and I'm learning about the different ways you generate income in real estate, I can say that each year I think the investment that I made is probably a more sound investment. And my most recent one was in fact a triplex in my hometown of Kingston because I wanted to make sure that the next property that I acquire results in some positive cash flow each month.

Kevin Mailo: [00:18:42] I love it.

Yatin Chadha: [00:18:42] And so, and so this is my goal. So the reason I'm doing real estate and first of all, listeners don't have to invest in real estate because I can tell you - and as you know, Kevin, you know more than me about this - but when you're starting early on in real estate, it certainly is a bit more active until you have your team on the ground and you understand the processes, then it can become truly more passive. But I'm still in that kind of more active phase. But what I want is that I want, let's say, a handful of rental properties so that by the time I am, let's say, 60, you know, most of that stuff is paid off. And then it's just, it's cash flow every month, it's gravy every month. And I don't have to work for that. Right? You're providing a necessary need for society, you're providing shelter. And that's something that at the end of the day, that would make me feel good, and I won't have to be grinding to earn that money. So that's why I'm investing in real estate. I want a certain number of dollars each month that are just flowing in at a certain point in time.

Kevin Mailo: [00:19:40] I couldn't agree more. Just on the real estate point. I mean, when we talk about an income based existence, very few things beat real estate, right? I mean, if you have a big stock portfolio or a whole bunch of bonds or whatever, you're going to have to liquidate that at a certain rate in order to fund your lifestyle and hope that the market continues to grow. But, you know, this year was a nice reminder that the markets don't always grow. So how much do you want to liquidate? But again, what's powerful about real estate, there's different ways to own it, but what's powerful about real estate is I've been through one, two, I think three cycles now, three downturns in Alberta's real estate market. But the money just keeps coming in. The income just keeps coming in, it's like, as long as I'm not under pressure to sell in a down market, real estate allows me to enjoy an income, you know. And that's what's so powerful. So, you know, people ask, does real estate mean that much to you? I say, Yes, real estate transformed my life. I used to worry about my future. I used to worry about money. And now I don't. Not that real estate is perfect. Not that it's all the answers, but it's a big part of my own financial picture because it's that very powerful income based existence that is so hard to get elsewhere. I mean, I know people that have made money in crypto and then watch them lose it all this year when crypto crashed, you know, and it's something about owning a hard asset. Yeah, I know. I know somebody who who got a little bit woken up with the crypto crash. Right? And all it took was rising interest rates. Do you know what I mean? And so there's all these swings, but real estate, again, it's not perfect, but it holds on nicely.

Yatin Chadha: [00:21:19] Absolutely. And I can tell you that when I acquired this latest property, I felt almost like a small weight was being lifted off my shoulders because I knew that my future became slightly better. And I actually bought the property when my wife was out of town. I told her I was serious about it. She didn't know I was going to buy it. She kind of freaked out. But we're all good.

Kevin Mailo: [00:21:37] You know what? That's okay. Sometimes you just have to jump on things. But, you know...

Yatin Chadha: [00:21:42] 100%, 100%, you keep keep going.

Kevin Mailo: [00:21:44] You converted your hard, hard working labor. You doing call, you doing extra clinics, you're doing those locums, you converted that labor into a lifetime of income through that triplex. Do you know what I mean? And you do that a few more times over the course of your career, and then you replaced your clinical income. And I know doctors who do it all the time and don't have to own the doors directly. You can invest in private equity. There are different ways to get involved in the real estate markets without having to manage your own doors, because I think that's a big downside for a lot of people that are in this space or thinking about this space, is like, am I going to be getting calls in the middle of the night for, yeah.

Yatin Chadha: [00:22:28] Well, Kevin, I'll speak to that. Absolutely. I will speak to that quickly. And I can tell you the one thing that I've learned over the last few years, and this is also from talking to you, is that how we spend our time is critical.

Kevin Mailo: [00:22:39] Oh, yeah.

Yatin Chadha: [00:22:40] And we have to be spending our time that is in line with how we want to live our our life and in touch with our core values. And so for me, I don't want to be getting calls in the middle of the night. So for this triplex, what I've done is I have this week, in fact, Thursday I'm handing the keys over to a property manager and that's incorporated into the the expenses of the property. And so the other thing that I'll kind of just say your comment about private equity, so, and I won't mention specific companies or what I invest in, but I did do my first private equity investment this year as well. And that was--

Kevin Mailo: [00:23:11] -- so did I. And it was amazing.

Yatin Chadha: [00:23:13] Good for you. Good for you. You know what? And I know that the two reasons I did it was it's a passive way of investing in real estate development. And then the other way, the other reason is, it's often, not always, but it can be uncorrelated from the market. So I wanted to just kind of diversify things and I wanted it to be totally passive. And so I did that. And so more for an offline discussion, people can obviously reach out to me. I won't mention specifics here, but yeah, just to comment on private equity there. And the other thing is, Kevin, in terms of having different sources of income over time, I have, I have become more interested in things like dividend stocks. You know, Canada is very rich with dividend stocks. And I know that Dimitre did a wonderful presentation at the Physician Empowerment Conference, so he did a great presentation. And the thing is, like, I know emergency physicians, I'm about to interview one in a month or so who basically reached his definition of financial independence. And a core component of his strategy was investing in dividend stocks that continue to raise their dividends year after year after year. There are so many in Canada. And when you look at this last downturn, Kevin, you kind of look at what's happened to stocks, what's happened to bonds, what's happened to crypto, the asset class among these more liquid asset classes that has actually fared the best, are dividend stocks. And so I think having that as a chunk of my portfolio, personally, it gives me an added layer of confidence and to get those dividends either monthly or quarterly, it just, it feels good when you see that.

Kevin Mailo: [00:24:49] I couldn't agree more.

Yatin Chadha: [00:24:51] I'm a fan. I'm a fan, it's not for everybody, but.

Kevin Mailo: [00:24:53] A big part of this is how well are you sleeping at night? I mean, you alluded to that earlier. And I consider that to actually be an investment criteria. Wing calls it the pillow test, you put your head on the pillow at night, are you sleeping better or sleeping worse? Because if you're sleeping worse, don't invest in it. Right? You know, if it's Tesla stock or whatever, don't invest in it. You know what I mean? Like so, you know, find things that are going to bring you peace of mind because that's one of the reasons to have money is to simply be happier and less stressed out about your day to day. Right? So if you're investing in a certain dividend paying stock allows you to feel better and go to bed at night feeling a little more secure in your future, then go and do it.

Yatin Chadha: [00:25:32] Yeah, it does for me. And there's a lot of wisdom coming from Wing. I mean, he's lived, he's lived a very experienced life, one with varied experiences. And so there's a lot of wisdom there.

Kevin Mailo: [00:25:43] Yeah, I respect it a lot, you know, and it's, it's about just getting to that point where you don't have to stress about your future and then at some point you don't have to stress about your monthly bills. That's the dream. It's hard to get there, requires a lot of discipline, a lot of savings and a lot of retained corporate earnings. But I know that Canadian physicians have tons of opportunities in front of them. You know, even though I just want to send a message of hope because I think a lot of Canadians that I've talked, Canadian doctors that I've talked to coast to coast, and I don't know about you Yatin, are really struggling. Right? I mean, inflation's going through the roof, cost of living, interest rates. But then it's our overhead is going up. And yeah, codes aren't keeping up. I mean, in Alberta, we just I think we just voted to ratify our agreement. But it's not, it's not going to keep up with inflation, you know, and so physicians feel squeezed and they start saying, well, now I'm going to work more hours. But there are actually strategies so that we are not working more hours to catch up or keep up. There are ways that we can utilize advance tax planning, learn to invest and really learn to grow without feeling pressure to simply pick up more hours, because I think most of us are probably tapped out.

Yatin Chadha: [00:27:00] You know, 100%. I'm going to comment on a few things there and interrupt me at any time.

Kevin Mailo: [00:27:05] No, no. Go, go.

Yatin Chadha: [00:27:06] We talked about kind of an income based existence. So we touched on dividends. We've touched on real estate. And for me, I'll talk about my experience. But for me, it's still kind of early stages for the podcast. And right now I'm beginning to have some conversations about, well, what's kind of the next step? But what I want to relay to the listeners here is, sometimes don't think that the path you are on is going to be your only path or the final path. You have to be very open minded and open to new experiences. And so I can tell you, when I decided to start the podcast, it was April 2020, that entire month, not by choice, because our volumes really slowed down, I was only able to work four days that month and I don't do well in that kind of setting, Kevin, and so I just thought to myself, there's got to be some other way for me to bring something useful to the world. And so I told my wife, Sima, I said, Hey, I'm getting more and more interested in finance. I mean, I drive my accountant crazy with all these questions. I'm always talking to you about it at home. But I told her, I think that there's a way to create something so that I'm bringing on subject experts and that through this maybe we can kind of enhance the financial literacy of the medical community. I think it'd be really worth trying. And so I didn't even do any research, Kevin, I did a quick Google search on, financial podcasts for physicians. I saw nothing and I was like, okay, good enough for me.

Kevin Mailo: [00:28:28] There you go.

Yatin Chadha: [00:28:29] I'm going to start it. Just do it. Pull the trigger. And to be honest, even though I'm not making anything off it right now, Kevin, just because I took a chance, because I made a decision in the moment and I acted on it, the pod is one of my, I guess it's one of my proudest accomplishments today.

Kevin Mailo: [00:28:46] Well, I'll tell you, I treat my companies like children. Like my companies are like babies to me. So you can just call it a baby. I don't know how your real kids are going to feel about that, but.

Yatin Chadha: [00:28:56] Yeah, yeah. No, I honestly, it's one of my proudest accomplishments to date today for those reasons.

Kevin Mailo: [00:29:01] You should be proud, it's incredible.

Yatin Chadha: [00:29:02] Thank you, Kevin. But you know what? And the real message I want to get across to people is that sometimes in life, whether you're thinking about starting a podcast, whether you're thinking about starting a business or you have an idea, just sometimes you have to act, sometimes you have to take a little bit of risk, and sometimes you have to just kind of throw that Hail Mary and hope for the best. And if you make a mistake, you'll be better for it in the long run.

Kevin Mailo: [00:29:27] And don't be hard on yourself for mistakes. I've made many mistakes in my financial life. Don't be hard on yourself. Accept it is a cost of learning.

Yatin Chadha: [00:29:35] 100%. I mean, make sure that you're sleeping well at night, but you have to take chances sometimes. And honestly, part of the reason that I continue to do the pod, it takes up a lot of my time right now. I mean, I'm not really making much off it at all. But, you know, at the end of the day, my kids see me do this and they ask me questions about it. And there's a lot of messages and lessons I want to teach my kids. And one of those is, Boys, I want you to pursue things that you're passionate about in life. I want you to learn how to work hard in life. And I hope that the things they see in our household, I hope that those lessons will be passed on to them and that they'll be better for it. You know, it's a multi layered process, Kevin. There's so much to this, and I think it's taken me a long time to realize this, but I think the pod has shown me where one of my key interests lie, is just in online education and there's so many ways to do it. And so that's the path that I want to kind of keep pushing towards. And it may not become apparent to you right away what your path is, but if you stick with it, if you do things with full intent and with passion, you will discover that path. So that's what I want to articulate for the listeners.

Kevin Mailo: [00:30:44] I absolutely love that. And you know what? With that, I can't believe we blew through over 30 minutes. We should probably wrap up, but I loved it. As you can tell, we could probably just keep talking and talking and talking, you and I, because every time we do this, we just go and go. But it was truly incredible. And Yatin, like, you just, you're so gifted in this space, you really just got to keep going and I know you will, and I know you're going to continue to succeed. And again, for our listeners, if you haven't listened to Yatin's podcast, I really encourage you to do so. It's the Beyond MD podcast and it's all over the Internet tubes. And so with that, I'm going to start wrapping up, say a final word, and then we'll get to some questions in our webinar here.

Yatin Chadha: [00:31:22] Yeah, Kevin, thank you for that. And the one thing I will also say is that the fact that you and your team have been at these webinars have been at these conferences year and year over and over again, it speaks to your passion and I've had many conversations with you offline, and in fact I've learned so much from you. One of the topics being real estate. You really lit a fire under me when it came to real estate. So I have to thank you for that. And honestly, you've, you know how to encourage people to pursue the areas that are most tied to their skill sets.

Kevin Mailo: [00:31:55] Find their why, find their why.

Yatin Chadha: [00:31:56] I know, I know people are going to get listen to you on many podcasts, but you're a great host, you're great at what you do, and I hope you and your team keep it up.

Kevin Mailo: [00:32:03] Yeah, you know what? We're going to keep working. And like I said, we've got the conference coming up this May 6 and 7, 2023. And it is going to be wonderful. That's something, I'm not the best at everything, but I'm very confident in what we do at our conferences, in our ability to transform physician's lives. And you've been there Yatin, you know.

Yatin Chadha: [00:32:20] Yeah, I'll be there next year too, as a guest. But I look forward to it.

Kevin Mailo: [00:32:24] Very much looking forward to having you there. So we're going to wrap it up because like I said, we can keep going and going. Thank you again Yatin for being on the show.

Yatin Chadha: [00:32:30] Thank you for this, Kevin. Oh, pleasure. Anytime.

Kevin Mailo: [00:32:32] Thank you. Bye.

Kevin Mailo: [00:32:33] Thank you so much for listening to the Physician Empowerment Podcast. If you're ready to take those next steps in transforming your practice, finances or personal wellbeing, then come and join us at PhysEmpowerment.ca - P H Y S Empowerment dot ca - to learn more about how we can help. If today's episode resonated with you, I'd really appreciate it if you would share our podcast with a colleague or friend and head over to Apple Podcasts to give us a five star rating and review. If you've got feedback, questions, or suggestions for future episode topics, we'd love to hear from you. If you want to join us and be interviewed and share some of your story, we'd absolutely love that as well. Please send me an email at [email protected]. Thank you again for listening. Bye.

Dr. Wing Lim, co-founder of Physician Empowerment, turns the tables and interviews Dr. Kevin Mailo for a change. Kevin talks about real estate investment for physicians and shares insights and advice from his own personal real estate journey.

With a family history of investing or buying in real estate, Kevin acknowledges that he came to real estate naturally. He sees real estate as a very powerful wealth creation tools and he names three main reasons for that: appreciation, positive cash flow generation, and mortgage paydown. Kevin gets into detail with Wing about how each of those three work. 

In this episode, Dr. Wing Lim and Dr. Kevin Mailo discuss how an incorporated physician can start in real estate investing, why Kevin feels real estate gives him more peace of mind than stocks or other portfolios, how to start if someone is not incorporated, and why eventually it’s advisable to bring experts in to help with property management. They shed light on real estate as a powerful tool for physicians to use to their benefit.

About Dr. Wing Lim

Apart from his clinical & teaching roles, Wing has extensive experience in Practice Management and Business Development. 

He is passionate about sharing his extensive knowledge & experience (both clinical & business) with others in various settings, from his clinic mentoring younger colleagues, to churches, senior groups, ethnic functions, radio broadcasts, retreats, seminars, and national conferences.

About Dr. Kevin Mailo
Kevin is an emergency physician based out of Edmonton, Alberta. He is known for his highly engaging teaching style that breaks down complex topics into memorable experiences. 

Kevin cares deeply about the long-term wellness of the medical profession and wants to see physicians and their families succeed personally and financially.

Resources Discussed in this Episode:

• Save the Date for May 6-7, 2023 in Toronto
• Robert Kiyosaki
• “The Growth Mindset with Dr. Wing Lim” episode on beyond MD with Dr. Yatin Chadha
• “How Finance Relates to Personal Wellness with Dr. Kevin Mailo” episode on beyond MD with Dr. Yatin Chadha

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Isn’t it enough to have a personal CPA & a regular lawyer for annual tax & corporate returns? What does a Tax Lawyer offer & when would we need one? Come & learn from a “fire side” chat between Wing & Jason the Tax Lawyer on February 2nd at 6pm.

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Physician Empowerment: website | facebook | linkedin

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Transcript

Dr. Kevin Mailo: [00:00:00] Hi, I'm Dr. Kevin Mailo and you are listening to the Physician Empowerment Podcast. At Physician Empowerment, we're focused on transforming the lives of Canadian physicians through education in finance, practice transformation, wellness and leadership. After you've listened to today's episode, I encourage you to visit us at PhysEmpowerment.ca - that's P H Y S Empowerment.ca - to learn more about the many resources we have to help you make that change in your own life, practice and personal finances. Now on to today's episode.

Dr. Wing Lim: [00:00:34] Well, welcome everyone. So good to have a few people show up on Wednesday evening. Alberta time 6, I guess it's 8 p.m. in Ontario. And so yeah, so I'm really delighted to have this webinar and so we hold this on a regular basis once a month. And so we're going to talk about real estate for incorporated physicians. All right. So this is not for the faint of heart, I guess, and I'm very delighted to welcome everyone and actually I'll be turned the table around. Usually I got interviewed by Kevin, but I'm going to interview Kevin. So I'm Wing. I'm Wing Lim, one of the co-founders of Physician Empowerment. And so I'm turning the table around to interview Kevin about this, this interesting topic. So of course, people have different backgrounds and people invest in different things, and there's a wide spectrum across all of four asset classes. And so let's start off by saying that why real estate, right? There are people who do nothing but index funds and people do nothing but mutual funds, some do stocks, bonds, some do exclusively crypto, bless their heart right now. And then there are also people, even within real estate, they flip and there are a lot of things they do. So let's just have a bird's eye view over why real estate compared to other asset classes. So, Kevin, what's your take?

Dr. Kevin Mailo: [00:02:03] Yeah, let me talk a little bit about my my story about real estate and why it came to me and fairly naturally. But I come from a family where, for a few generations, has always been somebody on either my mom's side or my dad's side who has invested and bought in real estate. And I saw a lot of wealth created in real estate. So real estate started with me at a very early age. I kind of got into it by accident. Initially, having bought our first property as our personal residence years ago in medical school, and eventually didn't get rid of the place but rented it out. And so that was years and years ago that I started. And since then it's been a really, really great journey. But real estate, it's a very powerful, very, very powerful wealth creation tool for a number of reasons. The classic three are the following benefits of real estate. Number one is appreciation. So if you look historically across all different types of real estate in buoyant markets in North America, right? So I'm not going to talk about other parts of the world that are depopulating or aging or, you know, stagnant economies like the Rust Belt in United States or things like that, where real estate can be stagnant or drop. What I'm really referring to is a buoyant market and it doesn't have to be red hot like the GTA or the Lower Mainland in Vancouver. But real estate appreciates. That's the first pillar of why I love real estate and why I invest in it. Number two is real estate, if done properly, generates positive cash flow. So if you were in a buy and hold model where - and it depends on the ownership structure and we'll get into this in a little bit - but if you're in a buy and hold model and there is a tenant, whether it's a commercial tenant, whether you own your own clinic, whether you have residential tenants, ideally you're generating positive cash flow every month, which is income that comes into either your your own pocket personally or corporately. And then lastly, this is the most powerful of the three, is mortgage paydown, right? So when you acquire that property in year one and this is a very simple example, when you acquire that property in year one, you're using a down payment of 20% or less, typically on residential real estate. And then you flash forward to year 26 when the when the property is paid off and the mortgage is cleared. That property has appreciated in value three times, maybe four times what you paid for, but what you didn't you didn't pay with all of your own money. You used a loan from the bank, use the mortgage to acquire 80% of that property in year one.

Dr. Kevin Mailo: [00:04:52] So somebody else, the whole 25 years that you held the property, paid that mortgage, and that is your tenant, whether it's a commercial tenant or practice colleagues or a residential tenant. And this is incredibly powerful and we've got our conference coming up, so for anybody that's listening to this or joining us on the webinar tonight, our conference is coming up May 6th and 7th in Toronto. We do it every year. It's an outstanding event where we talk about wealth creation for Canadian physicians, and we're going to be focusing on real estate this year because we keep getting more and more interest. But we're going to break this down in a lot more detail in May, but just put that in the back of your head that the wealth creation through real estate very passively is this mortgage pay down and appreciation. And it's stunning what the annualized returns are on that on very, very basic entry level real estate investing. Right? Like you don't need to be out there as some aggressive high level investor who's buying up, you know, shiny office towers. You can make a lot of money in real estate in lower class properties for sure. So Wing, do you want to take us to the next question, then? Sorry, you can tell I just keep going and going because I love it.

Dr. Wing Lim: [00:06:04] Yeah, you're right. Yeah. So, there are advantages of the real estate. So while there are advantage of others, how does that compare to stocks, bonds, all those others?

Dr. Kevin Mailo: [00:06:17] Yeah. I mean, you know, we teach at our events, we talk about investing in the markets. And for those of you that have listened to our speaker, Dimitri, he's phenomenal, right? Dimitri has been very active in the stock markets, very active in crypto. And I always say there are many, many ways to make to create wealth as a position. We have many advantages and many opportunities. It's really about finding what works for us. One of the things I love about real estate is, number one, to allude to my point earlier, is you get access to credit for it, right? So you can't walk into the bank and say, Listen, I'm really good at buying stocks and bonds. I'm really good at investing in crypto. Give me a mortgage for $1,000,000 and watch me grow it at 15% annualized return. The banks are just going to laugh you out the door, right? They don't do that. But if you say I found a property, I want to acquire it, I need a mortgage, the bank goes Sure, right? Because the banks inherently recognize the stability and the long term growth that real estate offers. They do not offer the same for the markets, and I think we're in a great year to prove that point. And not that you can't make money in a down market, there are going to be many people that make a lot of money in a down stock market, but it's tricky. Real estate for me at least, I love because it's relatively simple. You put your money in as that down payment. You put a tenant in and over the course of years that mortgage is rapidly paid down. The property accrues in value and you get cash flow.

Dr. Kevin Mailo: [00:07:50] And what I'm really getting at is peace of mind. One of the central things we teach at Physician Empowerment is that when it comes to investing, your investment portfolio, your strategy should reflect your life. So we have stressful jobs, we work long hours. So I really don't want to be up at night wondering what the markets are doing, wondering what crypto is doing. I wonder if my Tesla stock is sinking, not that I own no Tesla stock, not one bit of it. But just to give you a sense of like what's going on in the markets and appreciating that that can take a mental toll, whereas real estate, there's a lot more stability there, right? Like, you know it's trending upward. You know that every month, even in a down market, those mortgages are getting paid down. And so it offers a lot of peace of mind. And again, at the conference, I'll show you the math on this, where you can sit down and say, well, if I invest X amount in real estate and if it grows at a certain very conservative rate, then I'm going to be worth millions of dollars in 20 years time. And it's as simple as that, right? So it really brings a lot of peace of mind. So that's personally why I love real estate is and it's a very tangible asset, right? It's not an electronic signal on the internet like crypto. You can drive, I can go look at the properties I've invested in or the properties I own directly. So I hope that kind of answers the questions. I mean, there's a lot here, Wing.

Dr. Wing Lim: [00:09:15] Yeah, so maybe let's go one step further, right? Because the topic is for INC positions. So does it matter whether we INC, let's talk about INC and let's talk about those that are not INC.

Dr. Kevin Mailo: [00:09:30] Yeah. So yeah, real estate as an INC position there are a few advantages and one of the big ones is you can retain earnings within your professional corporation. You pay corporate tax on that right, like we all do. But then you have that extra $100,000, let's say sitting in your professional corporation, you can then transfer to a holding corporation and invest in real estate. And whether that's direct ownership or a limited partnership or syndicated deal or something like along those lines is it's a very flexible, relatively easy thing to do. Setting up a holding corporation is very straightforward. Your accountant and any average kind of lawyer can easily set one up and then it can be funded with shareholder loans from your professional corporation. So in that regards, there's a huge tax advantage, at least to start out with when you're acquiring real estate because you're not forced to take the money out of the corporation. Because in Ontario, as an example, the top marginal tax rate I believe is 53.53%. So if you had that extra $100,000 retained in your corporation and you wanted to take it out and buy a rental property, let's say, well, you're going to be paying that, most of that is probably going to be in the top marginal tax bracket, which is going to leave you with only 43,000. 47,000, pardon me, I'm very bad at math, especially public math, 47,000 ish to invest. Right? Whereas if you held that corporately, you'd be probably sitting closer to 90,000. So that's a big spread. So you can see, like if you're trying to build that portfolio, it can grow quite rapidly using retained corporate earnings. And again, we're going to be diving into this a lot more at our conference.

Dr. Wing Lim: [00:11:13] Yeah, exactly. So, yes. So I like the big gurus, like the Robert Kiyosaki of the world saying that I love real estate because I borrow the money for free. Everything I leverage. And he brags about owing $1,000,000,000 in debt, leveraging, getting higher on other people's money.

Dr. Kevin Mailo: [00:11:33] I put some caution there. I put some caution there because there are risks to that, to overleveraging in real estate. And, you know, the truth is and again, we can show you this at June just as a side dig, but in some cases, you can actually create an infinite return for yourself on real estate by using totally other people's money. I again, I caution because there is there is some risk associated with that and we can explain what that looks like. Can I step back and just talk about personal real estate personally, because I own a little bit personally and that was also an interesting journey. So, you know, converting one of my personal homes that I previously lived in into a rental property because I couldn't sell it in a down market with rising interest rates. So I kept it. And that was kind of an interesting journey and it works out all right in terms of the same things apply. You have annual appreciation, you have mortgage paydown. But the issue is, is that whatever cash flow you're making, whatever profit you're making on that place, you're paying top marginal income tax rates. So that's one of the, that's one of the big ones that I struggle with, is that whatever money you're going to make off of your personal holdings, you're paying, you're probably going to be paying at the top marginal income tax rate. So that's a bit of a struggle. And then the other downside is, is whatever you own personally is because it's not your personal residence, you don't get the capital gains exemption. So if you go to sell the property and let's say a gain 500,000 in value over the 20 years that you owned it, you're going to pay capital gains on that. So again, it's sort of, it's not that great. And then there are some questions as to whether you're exposed to more liability. But this is all direct ownership of real estate when you probably want to get to other types of real estate investing.

Dr. Wing Lim: [00:13:30] Yeah, but maybe we just pause. So what about those who are not incorporated? They don't have a PC. What do they do? Should they give up?

Dr. Kevin Mailo: [00:13:40] No, no, no. There are many ways to invest. I mean, you can run it as a proprietorship. Absolutely. Again, I would recommend very robust insurance on that and definitely sit down and talk with your accountant and talk to your lawyer before doing anything in real estate in general, but especially, you know, as operating as a proprietorship. But you can still invest in real estate deals, you know, as an individual. So most physicians are what we call an accredited investor, which allows them to step into private equity deals in real estate that the average person can't access. And you want to just explain what an accredited investor is for a minute, Wing?

Dr. Wing Lim: [00:14:16] Sure. Accredited Investor, well, there's a very technical definition, but basically, from what I can gather as a layman, is you need to own $1,000,000 worth of free property, have $5 million of cash, sorry $1 million cash, $5 million of of properties, in everything you hold liquid and illiquid, but also for most people is $200,000 a year of income for the last two years. Well, $300,000 a year of income counnting the spouse. So most physicians qualify.

Dr. Kevin Mailo: [00:14:48] Yeah. Yeah. So again, there are ways to invest personally as well, even if you are not incorporated. But again, sorry continue Wing.

Dr. Wing Lim: [00:14:59] So we step into it already, so we're ahead of ourselves. So yeah. So then what are the different ways to own real estate?

Dr. Kevin Mailo: [00:15:06] Yeah. Yeah. So let me talk about my journey a little bit and why I'm changing growing maturity as as a real estate investor. And for anybody that follows Yatin Chadha's podcast, I was on there talking about my own real estate adventures and lumbar puncture night, which was pretty memorable. People still mention that when I bump into them and I won't go through that war story again. But the bottom line is I started out investing real estate, buying doors. Right? And that's sort of the the colloquial term we use for acquiring small single family dwellings, whether it's an individual condo unit or apartment unit or an individual home or a duplex or fourplex. But what I'm getting at is something small scale that I own myself as an incorporated position, and then go and effectively manage it myself. And even with a property manager, it ends up being work. It's always work, right? And I think this is one of the things that turns people off of real estate, right? And so I bought enough doors that I got to a point where I had quite a few doors, if I can be honest with you, that was keeping me really busy, you know, in terms of phone calls about some small issue, big issues, vacancies, paperwork, bookkeeping, accounting, there was a lot there that added up. And, you know, I've got property management on most of my doors and it's excellent. But in the end, somebody's still going to phone you about things, even if it's not you in the middle of the night dealing with that broken toilet, which after a while when you realize, like if I keep going down this journey and keep just buying more doors, I'm just going to get busier and busier until I bought myself another job, right? And I'm busy enough with emergency medicine and raising my kids that I really don't want to take away from my personal time. And to go back to echo that point earlier, this is about building a better life, right? Whatever we invest in, whether it's the markets, crypto - crypto, right, this is not the year - you know, whatever it is, it should be buying us peace of mind, right? So there comes this kind of tipping point, and every physician's different, I mean, some people, you know, I'm sure there are physicians out there with like 50 doors and love it. Right? I'm nowhere close to that and already feel busy enough with what I've got, you know, realizing that as somebody who is initially very hands on, like, you know, I go paint walls with my kids because I want to teach them a little bit about the business. You know, I can swap out appliances like nobody's business. You know, maybe it's all that practice on central lines and airway equipment. It just gives me handy skills, you know, swapping out appliances. I don't mind it, but I realize that as time consuming as I get busier, I'm going to struggle with this. And even if you have to find a contractor for a lot of this, it becomes difficult. So now this year for the first time is I finally stepped into private equity, right? I realized that I didn't want to keep scaling up, getting more and more doors, more and more mortgages and more and more phone calls. Even if I am making money and loving that part of it, there comes this kind of tipping point where, as a busy physician, I say to myself, you know, how much of my time, even personal time can I deploy here? And so that's where I stepped into private equity. And that's where I really think most physicians are going to be happiest, right? Because I come from a background where I grew up enough around this stuff to understand it. I'm pretty handy. But at some point, if you're busy, you may just be, as a physician, you may be much more interested in private equity. And so physicians make a lot of money in this space when it's done properly. And what private equity is, is you're not on the hook for mortgages or personal guarantees in many cases, what you're really doing is you're lending money into a project where somebody else carries the credit risk and somebody else is in charge of developing the property and managing the property. And I did that for the first time this year, and I'm very excited and very happy about that, that new phase in my real estate journey as I mature from being kind of the hustler that's doing it all myself to now stepping away and investing at a higher level with people who are professionals in this space, right? People who are experts, because that's what we do in practice, right? When we're in over our head, it's time to consult. The same sort of thing goes in our financial journey, whether that's finding an excellent portfolio manager, whether that's finding a great accountant, whether that's finding a great tax lawyer or somebody to help us with insurance or again, property management or deals, at some point we have to let go. And that's one of the things I struggled with as a physician was that instinct, that impulse to micromanage. But as you can step away from that, you could make a lot of money and be happier and enjoy more peace of mind, which I think that's the the triple win there. So keep going.

Dr. Wing Lim: [00:19:53] So. Yeah. So there are different things you talk about: actively managing, change your own toilet all the way to private equity, you're totally hands off. So for those of us who are brand new at this, how does a busy physician start?

Dr. Kevin Mailo: [00:20:10] Yeah, I mean, this is always the thing. And so we talked about this earlier in this month's small group. So we lead a master class and Wing actually took us through a great one called Navigating the Asset Jungle. And one of the key pieces of wisdom that I'm going to say before you even get started is actually start. Right? I encounter physicians all the time who talk year after year about investing in real estate and never pull the trigger. Some of whom I followed for years. I have physicians that say, I'm going to get into the market, right, whether it's the public markets, stocks and bonds year after year, and you find out that they have six, even seven figures worth of cash stacked in their professional corporation because they are too scared to finally step out and put it someplace. And knowing that your cash is dropping. In our current inflationary environment by 10% a year. So if you have $800,000 in cash stacked up in your professional corp and you're too scared to invest it in real estate or the markets or whatever, you just lost 80,000 this year in purchasing power. Right? So the first piece of wisdom in this space is having the courage to actually do it, right?

Dr. Kevin Mailo: [00:21:24] So saying to yourself, I'm never going to know everything, but at some point I have to step out there and do that. And you know what? That's not that different than our clinical careers, right? I mean, I remember my first few weeks in practice being like, Oh my goodness, there is a lot here, but it's on me because I'm now an independent physician. And we have to carry that same mindset of being able to step out knowing that we don't have all of the answers, knowing that there's always going to be some risk. So the first piece of wisdom is do something, number one. The next piece is realize that you cannot fully eliminate risk, and that goes across any asset, be it crypto, the markets, real estate, whatever you want to buy, there is no zero risk here. So be willing to accept some risk in real estate. Create that wealth mindset which is optimistic, informed ability to manage risk. Right? We're not talking about blind gambling and we're not talking about blind trust of the professionals you're working with. We're talking about understanding risk and being able to accept and put a little bit of money on the line. The next big one--

Dr. Wing Lim: [00:22:28]  -- Sorry, let me interject to plug in. So the masterclass that we're doing next month, December, we're going to do the risk jungle, navigating risk jungle. 

Dr. Kevin Mailo: [00:22:39]  Good, good, good, good. That one took me years to learn, and I'm still learning it for anybody that's on this webinar. Drop us a line. Email us because we would love to have you join us just to drop in and see what a single, what a single webinar or masterclass with Wing looks like because they're outstanding. But yeah, we're going to talk about risk. So let me move to the next thing here in what I recommend as first steps, and this is start reading, start learning about real estate so that you understand how it works, so you understand the terminology and you can begin to talk the language a little bit. And again, you don't have to be the expert here. You don't have to be the most knowledgeable person in the room. But just having some awareness goes a long way. The other thing that I anchored to, through the good times and the bad with real estate, is those three truths - cash flow, why would we call them 3 truths, 3 powers of real estate - cash flow, appreciation and mortgage paydown. The reason why is because there are ups and downs in real estate. I've been through Alberta's real estate market with some downs over the years and you have to just open up those numbers and go, Well, I'm not gaining through appreciation this year, but I'm still making cash flow and my mortgages are still getting paid down, right? Because when you get to those core realizations about real estate, it allows you to hold the road, right? You know, when people with the stock market plummeting like it is, we'll say Historically the stock market goes up, I'll ride out this rough patch, even though it's an eye watering loss in a given year, which is why I have very little in the public markets. And I have no answer for crypto. None whatsoever. Don't. How about that? Sorry to be so blunt. Yeah, crypto keeps coming up, but it's just, this is the month that went under. So anyhow, just going on about educating yourself in risk, educating yourself in the basic terminology of real estate, and having a commitment to say, Okay, I'm not going to freak out here, I am going to put some money into a project and you can start small, right? You don't have, do not go throw a million bucks into a deal. Right? As your first deal. Like, don't do that. There's no rush. There's always new real estate deals coming up, always new opportunities coming up. So go cautiously, go slowly, and get comfortable with what you're doing. And then once you see those returns coming in, you can start saying, Okay, now I get it. I'm okay with this. And you can gradually put more and more in and that's how I did it. And 15 years on, I couldn't be happier.

Dr. Wing Lim: [00:25:16] Right. Cool. So maybe Kevin can share with us some pitfalls and lessons learned that you wish knew earlier.

Dr. Kevin Mailo: [00:25:25] Absolutely. Yeah. So, number one, I wish I hadn't worried so much. I spent so many years investing in real estate over the years, and I worried. It's kind of like raising kids. You know, you sit there and you worry about them day to day, and then you look back and you're like, What did I worry about? They're actually all right. And so number one is, I wish I hadn't worried so much over the last ten years when I've really been much more active in real estate. I wish I had scaled up sooner and gone into private equity sooner. I spent far too many years in my life managing my own doors and chasing smaller returns because I wanted to be able to micromanage it. And I wish I had stepped into private equity five years ago and gotten involved in bigger projects. The other big one is don't overleverage, really don't overleverage. The banks are going to give you a lot of money if you go out and ask for it. But that doesn't mean you take all of it because you're on the hook for that. And in the end, like real estate is, like, you make a lot of money leveraging. I'm not saying not to, but I'm just saying to be mindful that in the end you've signed personal guarantees on all of those mortgages. And so don't overdo it. Go cautiously. Go slowly. And build within your risk tolerance. Right? But don't be scared. Like I got, there are physicians out there that have $2 million worth of personal mortgage and it's on them to show up every month with a with a mortgage payment. Whereas if you had $2 million in rental properties, somebody else is coming up with those mortgage payments every month. And whatever you have to subsidize, if it's a slow patch or a slow month, it's a tax write off, right? So it's a huge, huge advantage to being in debt corporately with rental properties versus personally. And so I would say compare those two. What does $1,000,000 in mortgage, personal mortgage debt look like versus $1,000,000 in rental property debt, and realize that personal mortgage debt is far riskier than rental property debt. And then the other big one that I would encourage people to do is not get too caught up in faddish returns or all the glitz and glamor because there's a lot out there. Right? As an accredited investor, you're going to have a lot of people potentially approaching you, looking to invest with you, but you have to be mindful who you invest with and when you can speak to that because you've had more experience in private equity as a real estate developer. Right? But there's a lot of caution, right? The people in the finance and real estate industries do not hold the same fiduciary responsibilities that we hold towards our patients. So don't go into it with rose colored glasses. Be very aware of who you're working with and who you're investing alongside. I would say it is very important if you're looking at going into private equity.

Dr. Wing Lim: [00:28:19] Right on. So those are really good pieces of gem that you offer, Kevin. So while we're going to wrap up, so we intentionally don't want to make this a long, drawn out thing, because if you want to do more technicality, come join our master class. We'll do the deep dive. We're doing a whole year's worth of, well building strategies and real estate, and June would be a big, big event in Toronto face to face. And we're going to have a lot of fun and we're going to plan for some some nice trips down the road. This is a further down the road project.

Dr. Kevin Mailo: [00:28:50] Yeah, Yeah, exactly. Lots of great, lots of great opportunities to come together. But yeah, we're going to be talking about this in a lot more depth in May in Toronto at our national conference. So again, that's May 6th and 7th. We're going to be covering this. We are just in the process of moving to new email. So this is my personal email that I just send out to our webinar participants. But reach me personally if you have questions or you want to learn more because this is, there are a lot of great opportunities in real estate, and in my opinion, every physician should be invested in real estate, not all of it, right? Like you can be diversified if you want, but I'd say every physician should be looking at real estate because there are just so many advantages as an incorporated professional to invest in this space and so much return to be had and peace of mind. Like I said, real estate's been such a positive thing in my life.

Dr. Wing Lim: [00:29:38] Yeah. All right. Good. Super. So thank you. I want to thank Kevin for sharing your wisdom. And thanks. I want to thank everybody for joining.

Dr. Kevin Mailo: [00:29:47] Thank you so much for listening to the Physician Empowerment Podcast. If you're ready to take those next steps in transforming your practice, finances or personal well-being, then come and join us at PhysEmpowerment.ca - P H Y S Empowerment dot ca - to learn more about how we can help. If today's episode resonated with you, I'd really appreciate it if you would share our podcast with a colleague or friend and head over to Apple Podcasts to give us a five star rating and review. If you've got feedback, questions or suggestions for future episode topics, we'd love to hear from you. If you want to join us and be interviewed and share some of your story, we'd absolutely love that as well. Please send me an email at [email protected]. Thank you again for listening. Bye.

Dr. Kevin Mailo welcomes Dr. Bradley Block, otolaryngologist and host of the podcast ‘Physician’s Guide to Doctoring’ to the show for a discussion on using humour and setting boundaries in private practice. Dr. Block has a wealth of insight that he happily shares.

Dr. Block shares a rule he received from Scott Dikkers, founder of The Onion, on not punching down in using humour. The role of humour is to “comfort the afflicted and afflict the comfortable” and he shares examples of what that looks like in practice as a physician. Humour is a great way to increase rapport with patients and get them into a more relaxed state.

In this episode, Kevin Mailo and guest Brad Block talk about humour and how best to use it with patients, the flip side of how to carefully deliver bad news, why body language and non-verbal cues matter when interacting with patients, and how to draw important boundaries in private practice. While the instinct is to give everything to patients, a firm boundary for yourself and your self-care is vital to maintaining positive engagement with patients. This episode is both entertaining and enlightening.

About Dr. Bradley Block:

Bradley Block, MD, is a private practice otolaryngologist on Long Island, New York, where he lives with his wife and three young sons. He is a partner at ENT and Allergy Associates and creator of the Physician’s Guide to Doctoring Podcast.

He realized that rapport was the key to gaining trust, seeing patients efficiently, enjoying his practice, and building his reputation. He tried to find a podcast that would help him improve at doctor-patient communication, but there was none, so he created Physician’s Guide to Doctoring! The topics quickly expanded to “everything we should have been learning while we were memorizing Kreb’s Cycle,” and it is now a practical guide for practicing physicians, physicians-in-training and all allied health professionals. He is available as a keynote speaker on improving the patient experience, doctor-patient communication, and running office-hours efficiently.

Brad, or Dr. Block as his parents call him, went to med school at SUNY Buffalo and graduated with research honors. He then went on to his ENT residency at Georgetown. He enjoys spending time with his family, surfing (yes, there is surfing on Long Island), skiing (there is no skiing on Long Island), smoking meat, exercising, and finding any excuse to quote an 80s movie. “I’m not saying I’d build a summer home here, but the trees are actually quite lovely.”

Resources Discussed in this Episode:

• Scott Dikkers, The Onion

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Physician Empowerment: website | facebook | linkedin

Bradley Block, MD - Private Practice Otolaryngologist / ‘Physician’s Guide to Doctoring’ Host: website | podcast | linkedin

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Transcript

Dr. Kevin Mailo: [00:00:00] Hi, I'm Dr. Kevin Mailo and you're listening to the Physician Empowerment Podcast. At Physician Empowerment, we're focused on transforming the lives of Canadian physicians through education in finance, practice transformation, wellness and leadership. After you've listened to today's episode, I encourage you to visit us at PhysEmpowerment.ca - that's P H Y S Empowerment dot ca - To learn more about the many resources we have to help you make that change in your own life, practice and personal finances. Now on to today's episode.

Dr. Kevin Mailo: [00:00:34] Hi, I'm Dr. Kevin Mailo, the co founder and co host of the Physician Empowerment Podcast. And today I am very excited to be joined by Dr. Bradley Block, community based ENT physician down in New York and the founder of the Physicians Guide to Doctoring. And Brad, why don't you tell us a little bit about your practice background and what you're going to talk about today.

Dr. Bradley Block: [00:00:58] So I'm a general ENT and not realizing that going into general practice, private practice ENT would be mostly office hours. So, you know, in residency we're doing like four days a week in the operating room, half a day, maybe a full day of office hours, you know, and then lecture and the rest. In private practice, general ENT, we spend maybe four and a half days a week in the office and then another half day in the operating room, maybe a little more in the O.R. than that for some, but very, very office hours. And we see a lot of patients. And so what we're going to be talking about today is how I make sure that the patient experience is as positive as possible. Right? And so the reason that I founded my podcast, The Physician's Guide to Doctoring, is I noticed that there were a lot of experts out there that were helping people interact with other human beings, right? The interactions between salespeople and their customers, the interactions between people trying to date successfully or leaders and executives. But there weren't, there were these people with that expertise, but they weren't really focused on physicians. So I thought, you know what? I would love to hear what they had to say about specifically the physician-patient interaction. How do I get an audience with them? Well, start a podcast and then I can give them a call. And the physicians got to doctor and kind of sprouted from that because it became, really answers any questions that physicians might have that help us be better at physicianing. You know, it is either going to be the Physician's Guide to Doctoring or the Doctor's Guide to Physicianing. So better physicianing, whether it's in the office or interacting with our staff or being better community members, community leaders, public health issues, anything, anything that could help us be better doctors that we're not typically taught in our training.

Dr. Kevin Mailo: [00:02:55] Perfect. I love that. It is so true. I mean, this is the thing that we talk about at length here on the podcast. But in reality, during those training years, med school residency and those early practice years, we don't get a lot of training on that, right? And then the realities, as you alluded to, Brad, of going into practice and realizing that you don't have an hour for every single patient, right? So your patients need to feel valued, they need to feel heard, they need to feel that their concerns are important. And yet at the same time, you are running a practice where things have to move along, right? Because there are financial considerations to this. You know, you have to, you are a limited resource as a physician. We all are. And so how do we serve our community? How do we serve our patients as a whole? By being efficient, yet at the same time maintain that human connection, which I think is so, so important. So take us through. Take us through your approach. What have you learned? Maybe even share some failures or struggles. Tell us a little bit of wisdom, Brad.

Dr. Bradley Block: [00:03:58] So one of my favorite guests was Scott Dikkers, who founded The Onion. And I had him on on How to Be Funny. And he wrote a book called How to Be Funny, How to Be Funnier, and the finale to the trilogy, How to Be Funniest. And so he had a great rule for physicians and really for anybody, essentially don't punch down. But what it comes down to is the role of humor is to comfort the afflicted and afflict the comfortable. And so when you're deciding whether or not you want to make a joke, because if you joke around with your patients in the office, that is a great way to connect with them further, right? It's a great way to establish more rapport, to establish trust. People learn better when they're in a more relaxed state. And so you're going to decrease that cortisol that's coursing through their blood vessels when they're in the visit. So it helps them retain what you've what you're talking to them about and understand better. So there's a lot of roles for humor in the in the exam room. And so you always have to make sure you're using it to afflict the comfortable and comfort the afflicted. And so the afflicted in this case is your patient, right? And so you never want to make fun of the patient at all by any means. And then so who can you make fun of? Really, anyone. As long as you're punching up. Like you can make fun of the disease, you can make fun of the electronic medical record, you can make fun of yourself, although you have to be careful because you don't want to use humor that makes you look less competent at what you're doing. So you don't want to look like you're using like slapstick humor to look like you're bumbling. You can make fun of the institution. So there are lots of things that you can make fun of. And you said, look, one of my failures. So how do you recover from a failed joke? That's easy. You can use the same joke every time because even though it's the same thing to you, each encounter is a different patient. So you could always say, Oh, all right, I got it. That wasn't funny. I'll stick to doctoring. I won't, I won't make my foray into stand up anytime soon. So, you know, it's a quick and easy way to recover from a joke, but just identify that you made a bad joke because that can really sour the relationship.

Dr. Kevin Mailo: [00:06:09] Excellent. Talk to us about not using humor. Talk to us about bad news.

Dr. Bradley Block: [00:06:16] Bad news. Okay. So. So a great way... so you have to have a system when you're breaking bad news. You can't go in there without having a plan, just like when you're doing a surgery. You have a plan going into the operating room, right? If you're doing a procedure. When you're breaking bad news, you need to think first about how you're going to break the bad news. And a lot of times what you can do is you go through the steps with the patient of what's gotten you to this point. And what that helps them do is that helps kind of soften the blow as you're getting the bad news, as they're getting the bad news, because they can tell what's going on. So do you remember you came to me with that bump on your neck, right? And we weren't sure what it was. You'd already treated it with antibiotics. It wasn't going down. And so we decided to image it with an ultrasound. And that ultrasound, it really didn't come back with anything specific. So we decided to do a needle biopsy. Right? And what were we, you know, we were worried about that needle biopsy with was the possibility of cancer. Well, we got the results back, and unfortunately, that is the result, that it was cancer. And it's always important to use those words. Right? You don't want to say tumor, you don't want to say mass, you don't want to say malignancy, like use the C-word. Use the, you want to be frank about it. So you can kind of ease them into it that way. And once they have the news, you have to give them a chance to process it, right? So just let them, give them some time to sit with it. You can even give them some time to talk to someone. Would you like to call a family member right now? Would you like to... Listen, you have as much time as you need. Call one of your family members. Talk to them about it. I'll be back in a few minutes. And when you guys come up with some questions, we'll go over them. And then another thing they're going to need is they're going to need a clear delineation of next steps. And oftentimes, we don't have all of the steps, but they need to know what's happening next and it needs to be given to them with a good amount of confidence. Now we're talking about confidence. This is where we get into non-verbal communication. And so non-verbal communication can really be broken down into two different types, right? You want to convey interest and authority.

Dr. Bradley Block: [00:08:45] So when you're conveying interest, that's more like facial expressions and body language. I really love the term body language, but helps people to understand what's being said. So you convey interest, you know, keep eye contact, make sure you're actually emoting with your face. Right? Some of us get kind of stone faced, so you're emoting with your face and then the cadence and the volume of your voice can convey that authority. So when you're conveying that information, you want to convey it with that authority. So you're giving the bad news. You're emoting with the patient, right? And you are demonstrating that you have authority over what's going on with them. Like you're demonstrating your expertise. So. And then you need, that's when you come up with the plan. You don't want to go too many steps ahead as much as they will want you to. But what you do is you give them a clear follow up. So the next step, we're going to order this imaging. In m field, it would probably be okay, we're going to get a CAT scan to the head and neck with contrast, we're going to get a PET scan, and then you're going to follow up with me two weeks later. I want you to write down all of the questions that come up. I'm not going to have many answers now, but I'll answer what I can. But as you're processing this, you're going to come up with a lot of questions. Make sure you write them down, because each visit is going to be a lot more information than the last one. You might forget the questions that you have, so make sure you write them down and make sure you come with somebody. You don't want to come by yourself to these visits because of the volume and the complexity of the information that you're going to be getting. The reason I'm using cancer is the example just because in my field, that's usually what ends up being the bad news, and it's common in other fields as well. So those are a few bits of advice for how you break the bad news and how you kind of walk them through what's going to be happening next because they're going to feel like they've been cast out into space with no gravitational pull to bring them back and they don't know what's going, what side's up and what's down. So you give them some touch points to hold on to, and then you go from there.

Dr. Kevin Mailo: [00:11:01] So, many of our listeners are family physicians in private practice. And again, one of the big things that we feel is that time pressure and one of the commonest things - you probably don't get it as much as the specialist, but we get it all the time in family medicine - is that And what about this? And what about this? Right? And as patients struggle to access primary care, they often will come in with a laundry list of complaints or issues that they want worked out in that 50 minute appointment. And I completely sympathize with those patients. I do the same thing when I go see my own family doctor. So what do you do when you're having one of those days and you are running behind and not like 5 minutes, you're an hour behind because maybe it was a couple of difficult conversations around cancer. Maybe there's a whole bunch of loose ends. Maybe something blew up at the hospital or the O.R. and you're late getting into clinic, whatever. How do you navigate that data? How do you keep your composure? How do you make your patients feel valued? How do you speak to them honestly about what's going on, when, you know, for many patients, it's not easy, right? People got child care to coordinate. They got careers. You know, some people take a bus to get to the other side of town and see you. Tell me what that looks like.

Dr. Bradley Block: [00:12:13] So as an otolaryngologist, this happens as well.

Dr. Kevin Mailo: [00:12:15] Okay.

Dr. Bradley Block: [00:12:16] You know, I've got a patient that comes in with an active nosebleed and they also want to talk about their CPAP machine. Oh, and also they've been having some dizziness lately, probably because they've lost a bunch of blood from the nosebleed. But, you know, they assume that it's something from their inner ear. Everyone assumes it's coming from the inner ear. I can't tell you how many people I see when it's like, Oh, yeah, it's my earwax that's causing my dizziness. Okay, so just for the audience, earwax doesn't cause dizziness, okay? It's a skin issue. Can cause  hearing loss. But okay, so it's important to create boundaries. Now, I recognize that you said some of these patients are coming, they took three busses to get there, but you still have to create those boundaries. And I've gotten better at it as I've gotten along in my practice. Like I used to have patients, like they come in and they can't hear anything. Why? Because they have bilateral middle ear effusions. I could do a myringotomy at the time, but like you said, I've already got four patients waiting. So you know what? That procedure is going to have to wait. They're going to have to reschedule, make an appointment, and we can do bilateral myringotomy, maybe with tubes, we'll see. So I've gotten, I've gotten better about that. But yeah, that happens to me. I would make, when they come in, right, if they come in with that list at the get go, give them the choice of what they want to talk about. Okay. You get to pick two things and I get to pick one thing, but we're only going to talk about three things today. Or vice versa. I get to pick one. I get to pick two. You get to pick one. So whatever you feel comfortable doing as the physician. But they don't get an infinite list of things to discuss. And if you're already out the door and they say, Oh, wait a second, I also want to talk about this, Great, I'd love to talk to you about that. Unfortunately, we've run out of time. I do have three other patients waiting. We've covered a lot today. We talked about X, we talked about Y, we talked about Z. But we don't have time to talk about that too. So just schedule your follow up. It sounds like an issue that you should probably discuss within 3 to 4 weeks or whatever timeline you decide. But it's important to draw those boundaries. And as physicians, we're not trained to. We're trained to give up everything. Stay late, like miss your kid's birthday. I got a patient they wanted to be squeezed in today. It was my kid's birthday today, right? I'm already in the, you know, I'm already getting home late enough.

Dr. Kevin Mailo: [00:14:29] Exactly.

Dr. Bradley Block: [00:14:30] Like, no, no. Like, you can see one of my partners, or I can see you within the next couple of days. But no, I'm sorry. I just. So you have to get better at drawing boundaries. And you do that by keeping the patients to just a couple of issues.

Dr. Kevin Mailo: [00:14:44] You know, one of the things that I found helpful in the emergency department in my own practice is very often I'll take, I'll sit down with patients and I'm later then I said I would because inevitably I get called away to an emergency, something more urgent in the department, I get interrupted to deal with a result or something like that. I come back, I sit down with my patient, I apologize that I'm late, but I say this is important for me that I give you time and it's important for you that you get time. So now I've created time for you because I'm now towards the end of my shift. Let's say if it's something serious or complex, like a geriatric patient, there are a whole bunch of issues. I want to sit down and make sure that I am not rushing that. And as you alluded to earlier, Brad, that body language is everything. I make every effort to sit at eye level or lower than my patients and be near with them and never look like I'm in a rush when the department is busy. I really try to create that space in that time. And that's even about setting boundaries with other patients or residents or whoever wants your time. Right? And just saying, I have to go in here for a couple of minutes and sit down and talk to a patient, really convey or go over the issues. So I think that thing about boundaries is so important. And in terms of our self care, we do a better job when we're  caring for ourselves, right? If you were running late today for your child's birthday, seeing that patient, I mean, how good is that patient interaction going to be? Right? Because there's probably going to be some degree of frustration or angst or worry that carries in your voice as you interact with your patient versus any other day, Brad, when you could have sat down and created that space for them. So I think it was such a powerful observation that you made in terms of setting those boundaries.

Dr. Bradley Block: [00:16:30] Yeah, the non-verbal cues, they can pick up on that, they can pick up when they know that you're rushed. But it's also important that you convey those non-verbal cues. So sometimes, as I said earlier, we're a little stone faced, myself in particular, and they have trouble reading that we're interested. So it's, you can't fake it, but you can make sure that you're conveying it. And that helps those visits to actually go, those other visits to go faster. And when they feel like they're being heard, they feel like they're being understood, that you're more likely to move through the visit faster than if they're getting frustrated because they don't feel like they have your full attention. And that's often why they need to repeat themselves over and over. Another reason why they end up repeating themselves is because there's something that they're not saying that you need to get them to say. And sometimes it's important to really pull that out of them. And like, and I find it a good way to do that is say, What's bothering you about this? Like, right, people come to see me with with globus, right? They feel like they've got something stuck in ther, there's nothing actually stuck in their throat. What are you, what bothers you about this? Do you, do you think you might have cancer?

Dr. Kevin Mailo: [00:17:41] Right?

Dr. Bradley Block: [00:17:42] Yes, I do. Well I'm going to do this exam. And by putting this camera down your throat, I'm going to be able to see whether or not there's cancer. And if I can't see anything like it's extraordinarily unlikely that there's anything there. Right? So getting them to verbalize what's bothering them about their particular symptom can often get you over that hump where it seems like you're just going in circles, you're saying the same thing, they're saying the same thing. So a good question like that can move things along nicely and then everyone leaves the visit feeling more satisfied.

Dr. Kevin Mailo: [00:18:12] Yeah. Boy, I love that. So, Brad, this was absolutely outstanding. I don't want, I mean, I think we can go on and on and on. But give us give us your wisdom. Give us your insights. We have a lot of young listeners who are here. And I think even for for those of us that have been practiced for years, this is the one part of the job that we continue to evolve on. I continue to be humbled throughout my career by the things that patients have shared with me that were unexpected, that if I just took time and listened, I really came to appreciate the patient's perspective. So share share that wisdom with us, share your insights on how we can keep that humanity in medicine that's so important not only for our patients, but for ourselves as well. Because medicine is not a business. Medicine is not a technical skill or a set of knowledge. It really is a human, a human career.

Dr. Bradley Block: [00:19:05] Really, it goes back to what you said, right, about making sure you're taking care of yourself. Because if you are hating life, you're going to resent your patients for it, right? If you're burning out, you're going to resent your patients, and that's going to put up those boundaries, it's going to take away from their care. And it's not their fault that you've made these decisions or the system has put these these things upon you so that you can't take care of yourself. So you really, it's really important for that self care. And it's not just lip service, right? Like we've all been in that, I've been in that place where I've resented, I've resented it, I've resented the patients because I've burned myself out. And that's where the boundaries come in, wherever you decide to put them, wherever you decide it works for you that you can really enjoy. And I'm in that place again. I'm in that place again where I'm really enjoying what I'm doing. I mean, I do plan on retiring at some point. I'm not going to do this for, I'm not going to, you know, I'm not going to be those people that's like, oh, it's my passion. I enjoy it, right? But I definitely enjoy it. It's, I'm not in that bad place anymore because I figured out how to make those boundaries. So self care boundaries, all that, all that stuff, wellness stuff that we say, it really does make sense. It's just every person has a different way they need to go about doing it. You got to figure out what works for you and that might evolve as you practice. But yeah, you've got to look out for number one first.

Dr. Kevin Mailo: [00:20:33] Well, I absolutely love that. So again, for our listeners, I'd encourage you to track down Brad's podcast, The Physician's Guide to Doctoring, and he has got so much great material, so many great episodes with amazing guest speakers. So I'm very honored to have had you today, Brad, joining us on the Physician Empowerment Podcast. And for anyone listening, if you want to be a guest, we're always looking to hear from members of our profession and hear their perspectives and hear what they've got to share. So again, thank you, Brad. Absolutely loved it.

Dr. Bradley Block: [00:21:06] Thank you, Kevin. It's been a lot of fun.

Dr. Kevin Mailo: [00:21:09] Thank you so much for listening to the Physician Empowerment Podcast. If you're ready to take those next steps in transforming your practice, finances or personal well-being, then come and join us at PhysEmpowerment.ca - P H Y S Empowerment dot ca - to learn more about how we can help. If today's episode resonated with you, I'd really appreciate it if you would share our podcast with a colleague or friend and head over to Apple Podcasts to give us a five star rating and review. If you've got feedback, questions, or suggestions for future episode topics, we'd love to hear from you. If you want to join us and be interviewed and share some of your story, we'd absolutely love that as well. Please send me an email at [email protected]. Thank you again for listening. Bye.

Dr. Kevin Mailo welcomes Dr. Shawna Pandya - Physician, Aquanaut, Explorer, Director of IIAS Space Medicine Group, Space Medicine and Austere Environment Researcher - to the show to talk about her amazing career. But more than that, Shawna speaks about dreams and how to make them reality.

Shawna Pandya is an explorer, an aquanaut, she’s lived in a Mars simulation in the Utah desert, and she’s lived in an underwater habitat for five days. She works for a company focussed on immersive technologies and a company trying to put the world’s first rotating partial gravity artificial gravity space station into orbit. She’s also a martial artist, skydiver, and pilot-in-training. She has an amazing career. And she knows more than a little bit about having lofty dreams and not sacrificing them to reality but pursuing them with determination.

In this episode, Kevin Mailo and guest Dr. Shawna Pandya talk about the varied paths of Shawna’s career. And they dive deeply into how Shawna’s childhood dreams propelled her into the journey she’s on today. She addresses self acceptance, having a plan of action, positive visualization, preparing for setbacks, and the mentors who invested in her along the way. Her story and advice on dreams are deeply inspiring.

About Dr. Shawna Pandya:

Dr. Shawna Pandya is a scientist-astronaut candidate with Project PoSSUM, physician, aquanaut, speaker, martial artist, advanced diver, skydiver, pilot-in-training, VP Immersive Medicine with Luxsonic Technologies and Fellow of the Explorers' Club. She is also Director of the PosSUM Space Medicine Group and Chief Instructor of the PoSSUM Operational Space Medicine Group. 

She holds degrees in neuroscience (BSc Hons. Neuroscience, University of Alberta), space (MSc Space Studies, International Space University), entrepreneurship (Graduate Studies Program, Singularity University) and medicine (MD, University of Alberta), and is currently completing a fellowship in Wilderness Medicine (Academy of Wilderness Medicine).

Resources Discussed in this Episode:

• International Space University
• Nasa Johnson Space Center
• Chris Hadfield
• “An Astronaut’s Guide to Life on Earth” by Chris Hadfield

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Physician Empowerment: website | facebook | linkedin

Shawna Pandya, MD - Physician, Aquanaut, Explorer, Director - IIAS Space Medicine Group: linkedin | twitter | iias |  luxsonic | zenith canada pathways

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Transcript:

Dr. Kevin Mailo: [00:00:00] Hi, I'm Dr. Kevin Mailo and you're listening to the Physician Empowerment Podcast. At Physician Empowerment, we're focused on transforming the lives of Canadian physicians through education in finance, practice transformation, wellness and leadership. After you've listened to today's episode, I encourage you to visit us at PhysEmpowerment.ca - that's P H Y S empowerment.ca - to learn more about the many resources we have to help you make that change in your own life, practice, and personal finances. Now on to today's episode.

Dr. Kevin Mailo: [00:00:35] Hi, I'm Dr. Kevin Mailo, one of the hosts of the Physician Empowerment Podcast. And today I'm very, very excited to be joined by Dr. Shawna Pandya. And before we get started in the interview, let me say a little bit about Shawna, and she is a primary care physician who practices mostly emergency medicine. And for years now, even before her career in medicine, Shawna has been pursuing space medicine with a focus as well in extreme medicine and hostile environments. And so I would love to hear from you, Shawna, and that probably isn't the full introduction. Why don't you tell us a little bit more about yourself?

Dr. Shawna Pandya: [00:01:15] Yeah, sure. So first of all, thanks so much for having me on the podcast. I think this will be really fun. So for those who don't know me, here's a little bit about my background. I'm an explorer, I'm an aquanaut, I've been on expeditions in what we call analog environments. So that is environments that are analogous in some way to the spaceflight environments. I've been to the Mars Desert, or I've been to the Utah desert on a Mars simulation. I've lived underwater for five days, yeah, in a water underwater habitat. There's lots to talk about. I work with a lot of space companies with applications for Earth. I work with Luxsonic Technologies, which focuses on immersive technologies. So virtual reality, augmented reality, 360 video for medical education, for health care workers, physicians, paramedics and more. And I also advise a company trying to put the world's first rotating partial gravity artificial gravity space station in orbit by the end of the decade, as well as a space food company. So that's Orbital Assembly Corporation and IIAS, respectively. There's a lot we could talk about. So I think this is going to be fun.

Dr. Kevin Mailo: [00:02:23] Yeah. So there is a lot we could talk about. And it's funny because at first I was tempted to interview you about space medicine specifically, right? Because I think that's extremely exciting. I myself am a big fan or I don't want to say fan, but I constantly follow space exploration and all the remarkable progress we've been making throughout the world in terms of space technologies. But I really want to hear about your dreams and the meaning of dreams in our lives, because what struck me, following you on social media, Shawna, is the fact that what appears to be your dreams are very much a part of your daily reality. And that your dreams have been integrated into your career. In fact, your career is your dream. You live and work your dream, and that is so incredibly rare. And in Physician Empowerment, actually, in December 2021, we were actually in Mexico talking about wellness practice transformation. But one of the topics that we covered is dreams and how dreams provide not only goals in our lives, it's bigger than that. Dreams provide focus and meaning in our lives. They give us a sense of the arc of our life, and it can be a source of immense personal comfort and wellness as we pursue them. So talk to us about what dreams mean in your life. Tell us about your dream journey. Like, how old were you when you decided you wanted to go on this path?

Dr. Shawna Pandya: [00:03:47] Yeah. So my childhood journey is actually, I think, where this all starts. And I think that's where this idea of, Hey, I want to go to space comes from. Before that, it came with actually even bigger ambitions. So this is me as a nine or ten year old settling down, quote/unquote, decide to pursue astronautics. And so I think this is really a good example of what it means to be limitless and not--

Dr. Kevin Mailo: [00:04:13] -- I love that--

Dr. Shawna Pandya: [00:04:14] -- bound by what is possible in reality. And so to make that more concrete, so when I was four, I was like, I want to save the world. I want to do good. And I'm going to do that by being a Transformer, like I was going to be Optimus Prime crime fighter. We do good. And then I matured a little bit. I became seven and I realized, Oh, you can't actually be a Transformer. That's just ridiculous. So I thought, okay, well, I will be a billionaire superhero like in this Batman, Bruce Wayne kind of context.

Dr. Kevin Mailo: [00:04:46] Also very reasonable.

Dr. Shawna Pandya: [00:04:48] Very reasonable. You know, I matured. I'd put on some years since the age four. And I thought, okay, well, clearly I need to do good in the world. I need to pursue this Batman persona, you know, get lots of money and also fight crime. And then I realized that's not something you go to school for. You don't get your degree in billionaire-ology. So then by the time I was nine, this is also during the nineties when Canada had sent its first ever female astronaut to space - and that was, of course, Dr. Roberta Bonder - and I looked at her and I said, okay, she's Canadian, I'm Canadian, she's female, I'm female. So now all I need to do is be a neuroscientist, physician, astronaut, boom, done. That's my path towards astronautics. And so if you look at all of my homework from junior high, it was all about astronautics and how to get to space and just everything obsessed with human spaceflight and exploration. And then in high school, again, focusing down more, I said, okay, I'm going to go be a neurosurgeon. I'm going to medical school. That's what I'm focusing on. So my first degree was neuroscience. And then somewhere along the way, that space dream kind of crept back in. And so by the time I was applying for medical school, I realized how insanely competitive it was. And I said, okay, I'm not guaranteed to even get an interview. I need to pick a backup plan, a contingency that even if I don't get into med school, will make me happy that I could spend the entire year, you know, saying, this is amazing, like not wishing I was somewhere else, like medical school. And I'd heard of someplace called the International Space University, which is in Strasbourg, France, offers a master's program, and in reality is like Starfleet Academy, where you meet amazing students from all across the world. It's very, they abide by this international, interdisciplinary, intercultural perspective. We had 50 students, 31 countries represented. We had lawyers, engineers, future physicians and myself. Everything we did was collaborative. And that's when I realized maybe I didn't have to choose between space or medicine. Maybe there was an intersection. That's where I really learned about what space medicine was. And so kind of tying back to your initial question, this is kind of where realizing that, hey, having these big dreams as a kid, you can actually forge a path towards them. And that's really kind of taking what seems pie in the sky limitless, but also maybe not necessarily attainable, becomes attainable.

Dr. Kevin Mailo: [00:07:14] So talk to us about self acceptance of dreams and living them boldly. Because I'll be honest, I'm a big dreamer. I have lots of my own dreams about what I want to do with my life, where I want to go, where I want to see Physician Empowerment go. And, you know, it took me years to live that boldly. It took me years to even speak about my dreams. And for those of you that come to our conferences, you'll hear all about it. But tell me about like learning to live that boldly, learning to speak it, share it, and overcome the people that might have something negative to say or who who aren't necessarily there to support you. Because that's hard when we work in highly collaborative environments or even just with friends and family. So talk to us about overcoming doubt.

Dr. Shawna Pandya: [00:08:05] Yeah. So I mean, I'm a big believer in having a plan of action, having multiple contingency plans, and also taking concrete steps to put yourself on the way. And I think Chris Hadfield actually captures this in his book perfectly when he says when he was a kid and decided to be an astronaut, he didn't just go into his kitchen and declare it to his family because he would have been laughed out of the kitchen. He said, okay, I'm just going to be the best student possible. I'm going to do this. I'm going to pursue a career as a fighter pilot. And so it comes down to creating an action plan of how is this going to move me forward towards my goals and my ambitions, and then also realizing that you can prepare yourself and that also just because you're not eligible for something today doesn't mean you shouldn't keep it on your radar. And so to give you a concrete example, I knew about the Canadian Space Agency sponsored Aerospace Medicine elective to go down to NASA for a month and perform research related to space medicine. I knew about that since I was in Grade 11 and I would, like, compulsively check the CSA website, but you weren't eligible to even apply for it until you were final year medical school or until you were a first year resident. So, I mean, that was at least a decade off. But the nice thing about keeping an eye for these opportunities is it gives you something to reach for. Then you start putting together that ladder that gets you there. You start making yourself a competitive candidate. And so that was always in the back of my mind. And by the time it came to apply, you know, I had publications under my name, I had a book chapter under my name. I was very involved in Canadian space activities. And so I became one of two Canadians sponsored for that term to go down to NASA. So part of it is being aware of the opportunities and then working towards them as a matter of attaining your goals. And then the other part of it is rehearsal and for the hard things. And so to give you an example of, like, how rehearsed I've been for what I've deemed the most important things in my life, I will practice it before the real thing ever comes. And so when I was writing my MCAT, my medical college admissions test, which I'm sure the entire audience is familiar with us, they've all we've all had to write it. My family was out of town. It was to a new part of the city I'd never been to. So as a dress rehearsal, I drove all the way to the test site, found my parking spot, figured out how long it would take me to get to the test hall, make sure I knew where it was. I did all of that the day before, just to make sure I knew that part of the the concrete part. I applied to medical school a year before I was qualified to even apply, just so I could go through the essays, know what they asked for, have them all written. So when it came time to actually apply, I had something to draw off of. Same thing for Canadian Space Agency astronaut selection. Even the years I wasn't eligible, I went through their 50 page, literally, 50 page submission process, so I knew what they were asking for, so I knew what they were looking for. So the qualifications I didn't have, I would just go out and get them. And so there's an element of preparation and planning and action that really comes along with realizing our dreams.

Dr. Kevin Mailo: [00:11:15] I love that. Tell us about positive visualization. Right? Because it's one thing to say, oh, I have this dream on the horizon, but like positive visualization goes further in that we start to have specific stepping stones imagined or seen or written down. Talk to us about the role of positive visualization in your mind, as well as negative visualization of setbacks.

Dr. Shawna Pandya: [00:11:43] Yeah. So I think we need to talk about, we can't talk about positive visualization without negative visualization. And I call it the what if game. Anyone who practices emergency medicine will be doing this at all times because we're constantly asking, What is the most likely diagnosis? What is the worst case scenario? Best case scenario? What else could this be? And in everything we do in life, we should be asking the same, like, what is most likely to happen? How would this work? What would this look like if this is was a best case scenario versus what could go wrong and the reason that we do this, so when we talk specifically about positive visualization and we go through, for example, the exact steps to do a procedure in medicine, we're building that muscle memory by activating our supplementary motor areas. So we're kind of priming our brains to say, I'm ready to perform. But the value of going through the worst case scenarios, playing that what if game is also saying, how am I going to react, I don't want to be caught unawares if something bad happens because I didn't plan for it. So I call it the What if game. Chris Hadfield calls it the power of negative thinking, but it's also preparing ourselves for the reality of what life is and saying that I have a plan for that as well.

Dr. Kevin Mailo: [00:12:56] I love that. I love that. Talk to us about failure or setbacks. Because I think that is inevitable. Any time we are pursuing a higher goal or a dream, trying to get somewhere, we encounter failure. And again, that's another thing it took me years to embrace was failure as a stepping stone to success. Talk to us about failure. You don't have to share any specific stories, but how you overcome failure, how you approach it, how you learn from it, and then how you move ahead and try again.

Dr. Shawna Pandya: [00:13:33] Yeah. One of my friends, she's amazing. She's Canada's seventh female fighter pilot and she said, If you've never failed, you're either lucky, lying, or Jesus himself. So I love that. And I, for me, I say, if you're always winning, you're probably in the wrong league. So you have to fail because you're not really pushing your own limits if you haven't failed. And the other part of it is to realize that success and failure are two sides of the same coin. And what I mean by that is even when we succeed, our successes aren't always pretty and perfect, that there's something that can always be improved upon. And when things, when we fail, it's not final. There's a quote that says Success is not final. Success, or failure is not final, failure's not fatal. It's the courage to go on that counts. And that's basically saying, well, if you fail, you've only failed if you refuse to do something about it. Why not take that situation, analyze what went wrong, figure out what went right so you can reinforce that part, and then come up with a plan to address the part that didn't go so well. And in the operational world, in aviation and space, we call that the art of the debrief. Any time we fly a zero gravity campaign, we are debriefing after every flight because we want to know what went well so we can reinforce that pattern of performance. What didn't go so well, so we can share those lessons learned with the rest of the team, and also so we can change our own actions and performance patterns in what didn't go so well. And so that's why I say success and failure are two sides of the same coin, because there's always actions to be optimized.

Dr. Kevin Mailo: [00:15:02] Absolutely love that. What else do you want to share with us about your journey or about what you've learned along the way in terms of pursuing your dreams?

Dr. Shawna Pandya: [00:15:11] Yeah, I definitely feel like I'm just getting started. I think there's so much else I want to do. So many other places I want to go.

Dr. Kevin Mailo: [00:15:20] I love that because you've been at it, like, dreaming for over 20 years, right?

Dr. Shawna Pandya: [00:15:24] Yeah I've been doing it my whole life.

Dr. Kevin Mailo: [00:15:25] But it still feels fresh. It still feels new. I really love that.

Dr. Shawna Pandya: [00:15:28] Absolutely. Every single day is like, Wow, I can't believe that someone would think of me for this. That's amazing. And part of it is you can't acknowledge success without acknowledging the imposter syndrome. We all feel it.

Dr. Kevin Mailo: [00:15:41] Right. Right.

Dr. Shawna Pandya: [00:15:42] And what I've learned is it's an opportunity. It's a growth opportunity. Right? Because someone even if I don't feel ready to be in, whatever, in medical school or to be in this position within a company or an organization, someone somewhere saw something in me that they believed I could do this. And so it's an opportunity to become better, smarter, more educated, and then also execute. So that's how I deal with the imposter syndrome. And then just realizing that you have to love every bit of the journey. And there's people who say, I want to be an astronaut, I'm going to study engineering, even though I hate it. I'm to go get my operational certifications in skydiving, whatever, even though I hate it. And when they're hating every step of it and then maybe ultimately they are medically disqualified forever from astronaut candidacy and they feel like they've wasted their life. And for me, it's the exact opposite. I love every aspect of what I do and every part of the journey. That's how I work seven days a week. That's how I live out of a suitcase. And I'm home for maybe three days a month because everything I do is absolutely fun to me. And I think that's key when realizing, you know, if this is the path I want to pursue, is it actually the path I want to pursue, get those data points, live it, and then figure out, is this how I envisioned it to be?

Dr. Kevin Mailo: [00:17:02] Amazing. Talk to us about the importance of mentors and surrounding yourself with people that build you up, because I know I've certainly, over the years, become much more mindful of who I spend my time with in terms of sharing my dreams, working towards my dreams. Because there are people that build us up in life. There are people who bring us down. Talk to us about how you seek out mentors. I would love to hear that because I bet you, well already, from what you've mentioned, it sounds like you met some incredible people on the journey.

Dr. Shawna Pandya: [00:17:28] Yeah. So for mentors, I think mentorship, I have this view of it doesn't have to be this very formal relationship. It doesn't have to be, hey, will you be my mentor? Because I think there's this unrealistic expectation that this person is going to transform you into the person you want to be. And that comes from within. And I think we don't do a good job with with any type of mentorship relationship setting those expectations that, no, it's you. You're the one who has to set your goals and pursue them and come armed with questions. And that's the approach I've always taken. And then the other part of it is just feeling, realizing the social contract to pay it forward, because I wouldn't be where I am if incredibly busy people hadn't taken time during their careers to invest in me, even though they didn't have to. And the best example I can give of that is someone I've mentioned a lot through this podcast because the first day I ever interned at NASA's Johnson Space Center, the phone rang in my office. It was off campus. I'd lost my passport, I was frazzled. So I picked up the phone and I said, I'm sorry I have to put you on hold. And then I realized that the person on the other end of the line said that was Lieutenant Colonel Chris Hadfield, who is training to be commander of the International Space Station. And I just put him on hold. And so the man was busy. This was 2012. He was training to command an entire space station, but he still found time to take myself and the other Canadian medical student out for coffee, answer questions about space. Why? He has no impetus to do that. All of this, all of the Canadian astronauts, Jeremy Hansen, David Saint-Jacques, they took time to invest in us. That's amazing.

Dr. Kevin Mailo: [00:19:10] That's incredible. That's so inspiring.

Dr. Shawna Pandya: [00:19:13] Right?

Dr. Kevin Mailo: [00:19:13] Yeah, like, what a Canadian hero.

Dr. Shawna Pandya: [00:19:16] He was amazing. I can't say enough good things about him. And so, to me, that really is a lesson in pay it forward. Like, you know, as busy as I get, I also feel a duty to help others, to help answer the questions. I'm involved with [00:19:31] Gosh as a mentor. [00:19:32] Space Prize Fellowships, [00:19:34] sets Canada [00:19:35], Zenith Pathways, Women in Aerospace Medicine. Like there is a very long list that I'm sure I'm forgetting more because once upon a time I was at that stage and I definitely wouldn't be where I am if folks hadn't taken the time from their schedules to invest in me.

Dr. Kevin Mailo: [00:19:52] Wow, wow, wow. What a great story. And so beautiful to talk about paying it forward. Right? Because I think that enriches us immensely when we can take the time and help somebody who's on a similar journey or somewhere further down the path or coming up the path like we are. So powerful. I think that also helps renew our interest in our dreams and energize us and focus us. Wow. Shawna, I'm not going to, I'm not going to keep you longer because I know you're busy. Do you want to share like a book that you love that might be related to this? But that's always hard because I'm putting you on the spot. I didn't give you any prep about that ahead of time.

Dr. Shawna Pandya: [00:20:30] It's very on brand. It's the same book I've been quoting this whole.

Dr. Kevin Mailo: [00:20:33] Go for it.

Dr. Shawna Pandya: [00:20:34] Chris Hadfield's 'An Astronaut's Guide to Earth'. It's very resonated very much with me. A lot of the lessons I've shared this hour have been from that book and also through my own lessons, so totally recommend it.

Dr. Kevin Mailo: [00:20:46] Was that the guy that you put on hold when you... Oh, that guy okay. Yeah. Yeah. Amazing. Amazing. That's truly incredible. Love it. Okay, Shawna, thank you so much for coming on and just sharing your story, sharing your journey. It is so inspiring. As I said earlier, it is rare to meet people that live their dreams so boldly and so fully. And yet dreams are maybe one of the most important things in our lives because they give us so much meaning and joy. And like you said, it's the journey that has to be savored, not just the destination.

Dr. Shawna Pandya: [00:21:20] Absolutely.

Dr. Kevin Mailo: [00:21:21] I love that. Thank you so much, Shawna.

Dr. Shawna Pandya: [00:21:24] Yeah, my pleasure.

Dr. Kevin Mailo: [00:21:25] Thank you so much for listening to your Physician Empowerment podcast. If you're ready to take those next steps in transforming your practice, finances or personal well-being, then come and join us at PhysEmpowerment.ca - P H Y S Empowerment.ca - to learn more about how we can help. If today's episode resonated with you, I'd really appreciate it if you would share our podcast with a colleague or friend and head over to Apple Podcasts to give us a five star rating and review. If you've got feedback, questions, or suggestions for future episode topics, we'd love to hear from you. If you want to join us and be interviewed and share some of your story, we'd absolutely love that as well. Please send me an email at [email protected]. Thank you again for listening. Bye.

Dr. Dimitre Ranev welcomes Galen Nuttall, Certified Financial Planner (CFP), to the podcast to discuss some of the ins and outs of financial planning. Galen answers questions about what financial planners do and explains the differences between a financial planner and a certified financial planner.

Galen Nuttall has a background in teaching and a Masters in Education, but his father was a physician (a nephrologist) and he estimates half of his current clients are also physicians. The combination of his ability to teach financial concepts with ease to any audience and his familiarity with physician financial needs gives him great insight to share with listeners.

In this episode, Dr. Dimitre Ranev and guest Galen Nuttall break down some misconceptions surrounding CFPs and the value of financial planners. Galen discusses the value of incorporation for physicians, retirement planning, riding out economic slowdowns, and some advice about taxes. His knowledge is vast and makes for valuable listening.

About Galen Nuttall:

Galen Nuttall grew up watching his dad (a now-retired nephrologist) struggle to make good decisions around his money. It felt like everyone wanted time with him to pitch the latest and greatest financial product. Now that he’s a planner, he sees why so many Canadians are unsure how to invest their money. There are so many options and even the experts seem to disagree. No wonder most Canadians are confused and don't know where to start. 

As a planner, Galen is changing this. With a background and a Masters in Education, Galen is able to explain financial concepts with ease and enjoys imparting financial literacy to people. He says a fee-based financial plan answers the biggest questions around investing with cold, hard facts. Plans should be evidence-based, not based on opinions or preferences. 

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Physician Empowerment: website | facebook | linkedin

Galen Nuttall, M.Ed, CFP: podcast

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Transcript:

Dr. Kevin Mailo: [00:00:00] Hi, I'm Dr. Kevin Mailo and you're listening to the Physician Empowerment Podcast. At Physician Empowerment, we're focused on transforming the lives of Canadian physicians through education in finance, practice transformation, wellness, and leadership. After you've listened to today's episode, I encourage you to visit us at PhysEmpowerment.ca - that's P H Y S Empowerment dot ca - to learn more about the many resources we have to help you make that change in your own life, practice and personal finances. Now on to today's episode.

Dimitre Ranev: [00:00:34] Welcome back, everyone, to the Physician Empowerment podcast. I'm very honored to have Galen Nuttall as a guest today. I actually met Galen at the Physician Department Conference in June. Galen is a financial planner, he's an investment advisor, and he's a certified, he has a CFP Certified Financial Planning certificate, as well as a Masters in Education, which I find really interesting and actually really important because financial products can be extremely hard to understand, especially when we talk about insurance. I mean, any product and it's so important to be able to explain things, simplify things. And just reading some of the comments on Galen's website, it seems like it's something you do very well and having spoken to you, it's something you do very well. I can say that again. You also have your own podcast, I think it's called a Clean Bill of Wealth. Is that correct? I think you post twice, twice a month?

Galen Nuttall: [00:01:27] About two, yeah, I do about two episodes a month.

Dimitre Ranev: [00:01:29] And you have guests and then you have sort of solo things and you're really good at explaining concepts. Today I just, one of the reasons I have you on is I think people need to realize that investing is a journey and it's a very personal one. There is no one size fits all, even though a lot of people will tell you this is the best thing to do. For example, now the current rage - and I'm not saying it's bad - but the current rage is to do your own investing, low fees, put all your money in an ETF and forget about it. But just like I'm giving an example of medical conditions, so for example, if somebody wants to lose weight, your job as a doctor is to show them all the tools available to them so they can find what's best for them, whether it's exercise or diet or even an emotional thing. Just like that's investing as well. There's different tools and you need to be aware of them because if you're not aware, then you won't find what's best for you. Today I want to talk about the tool of having a financial planner on your side. So I always like to start off with definitions because there's so many definitions in the financial world and it's so confusing. So, Galen, do you mind if we start by I want to ask you, because you do two things. You're a financial planner and an investment advisor. Can you tell me what is, when you put your financial planning hat on, what is it that you do? What is your role?

Galen Nuttall: [00:02:53] Yeah, Yeah, very good question. Yeah. And first off, thank you so much for having me. I definitely enjoyed attending the conference and meeting and we probably could have talked a really long time about financial stuff when we were hanging out after the conference. So I really appreciate being here. Completely. Yeah. And, I mean, and I love what you said about I do have a Masters in Education, I bring that to the table. If anyone checks out any of my videos, I'm usually using a whiteboard. I'm a very big believer in visual learning. Most people resonate with that. So yeah, when it comes to definitions and certified financial planners, so I mean, I guess the easiest way to look at it is certified financial planner is the international designation for financial planners. So the way that you get this designation is you have to have a certain number of years working as a financial advisor and then you take exams. I had to read about 1200 pages worth of textbooks, take multiple module quizzes, and then one three hour exam, then one six hour exam, and then a three month long case study. And then you're part of the certified financial planning body. And every year you vow to uphold the code of ethics of the certified financial planners. And as all good things, you pay an annual fee to stay on their list. And at the end of the day, really, I mean, I'll say why I got my financial my certified financial planner, I was already an advisor for many years and I felt like I was doing a really good job, but I was not able to offer fee based planning, which is that someone... I was coming up against giving people advice and the only way I could get paid before I got my certified financial planner was if they bought something from me. So like, I would, sometimes I'd give people, I would take people through a very lengthy process of discovery, of recommendations, of portfolio construction, of insurance recommendations. And they would say, Galen, I actually am not ready to do any of these things, but I would love to pay you for your time because I realize you've spent a lot of time on this. And I kept having to say no because I was not allowed to take money like the way that a lawyer may bill you by the hour or the way that an accountant may bill you by the hour, I couldn't do those things. So I got my certified financial planner so I could start doing that, which is hourly fee based and planning based, which is someone can pay me for a plan that they can implement wherever they want for themselves or with me. So that was the main reason I got it. So I think that's probably one of the best ways to quote/unquote define it, is that some people say, Oh, you should only work with someone who's a certified financial planner. I'm like, Well, I was in this business for like seven or eight years before I became a certified financial planner and I stand by all the recommendations I gave before I got it. But like, if you meet someone who has their CFP, they're taking it pretty seriously. Like someone doesn't go to all these lengths to to get this designation without being pretty serious about the career. So I would say it's a sign of that. So yeah, that's, that's kind of my journey with the CFP.

Dimitre Ranev: [00:05:40] And when did you get your Masters in Education? When did that happen in sort of your journey as an advisor?

Galen Nuttall: [00:05:48] For sure, yes. I mean, so I started, I taught overseas, actually, I moved to Venezuela when I was 22 and worked for a grassroots development organization. And I was only going to stay there for a year and I loved it so much, I decided to stay longer. And then I got married and I ended up staying ten years and I started working for an international school. And while I was working for that school, they said, Galen, you know, there's like a rule where I could work for a year or so, but then I had to start working towards my teaching degree. So I said - and I never wanted to be a teacher, it was never my thing - but I am, I would say that my superpower is making complex concepts simple, usually through whiteboards. Like that's, I love making financial concepts simple. Almost every meeting I have with people is a shared screen whiteboard meeting, because that's what most people enjoy. So I started teaching, I had to get my teaching degree, and then I went ahead and got my Masters. So I finished my Masters back in like 2010 and I had every intention of continuing to teach. But my wife and I left Venezuela because it was getting too dangerous. We were worried about either me or my son getting kidnapped, so we said, We better leave. We looked all over for other international jobs, but it was around 2008, 2009, economic downturn. So a lot of international schools weren't hiring as much. So we ended up in Canada and there were no teaching jobs to be found. So I made a transition to financial advice. My advisor said, Galen, I think you'd make a good advisor. And initially I said, I am not interested at all. I was like, I don't want to be, I don't want people calling me when the markets are crashing. I don't want to be the guy at the party that's trying to sell you life insurance. And they said, Well, you don't have to work that way. Like you can find your own way of working that works for you. Because I was like, I can't do anything sleazy or salesy or knocking on doors, I don't want to do any of that stuff. So they said, No, you can figure out how to do it without doing those things. So when I started, it took me a little while to embrace it, but I realized that one of my differentiators - because there's like, I don't know, like 20,000 CFP in Canada or something like that - I was like, What's going to make me different? And it's like, I have a Masters in Education. Like I know how to explain things and I know how to tell if someone's understanding something or not. So I went guns blazing into like drawing and educating and like really heavy on that side of things. And so yeah, so I got the CFP in 2010, sorry, my Masters in 2010, I became an advisor in 2013, and then I got my CFP I think in like 2018 or 19, something like that.

Dimitre Ranev: [00:08:08] What kind of education were you doing in Venezuela? What were you, what subjects were you teaching? I'm just curious.

Galen Nuttall: [00:08:13] I was teaching, I was the core teacher for grade five at the International School in Caracas, Colegio International de Caracas. I was the grade five teacher, so I taught basically the core subjects, everything but P.E., everything but Phys Ed and Art, basically. And music, I didn't do music.

Dimitre Ranev: [00:08:28] I'm certainly curious. Did they have any like sort of financial teaching as part of the curriculum? No, because if you didn't have it in Ontario, like when I was growing up, there was no such thing. Right.

Galen Nuttall: [00:08:40] Not really. They've got, I think they've got some pretty good now because I know my son has come home and talked to me about interest rates and borrowing and all these things, and I'm like, All right, all right. Like, I like this. Like if they're at least teaching kids not to take on lots of credit, like bad credit, then I'm pretty happy. So I think they're doing a pretty good, my son was getting pretty into it. But no, we didn't, I didn't teach any financial literacy. I taught grade five. And really, like, one of the things I say is one of the hardest things I've ever had to do was teach fractions to grade five. So I know how to teach anything to anyone. And I really do take it, like I typically start with people and I say, Look, I'm going to take it to a grade five level. If you need me to go more complex, I can, but that's where I'm going to start. And then I let people decide whether they want to go more complex or not.

Dimitre Ranev: [00:09:21] And I'm so, you know, I teach from, I teach myself from McGill. And I think it's so important to have that visual element because to me, I'm a visual person. Not everybody is, right? Not everybody is. But I love the whiteboard. I love drawing things and talking things through. It just, I remember somebody was trying to explain me something about pensions two days ago, and I didn't get it until they drew it and like, Oh, that clicks. So yeah. So I'm glad that you do that because I think it's quite important. My question is, because you told me when I talked to you at the conference that you have a pretty sizable medical clientele. Is that correct?

Galen Nuttall: [00:09:58] Yeah, I'd say like of the last ten clients I brought on, I pretty much, half. Half the clients I bring on are incorporated business owners and the other half are incorporated medical professionals like physicians.

Dimitre Ranev: [00:10:09] How did that happen? Is it just sort of randomly or what?

Galen Nuttall: [00:10:13] Yeah, it's a good question. So when I started as an advisor, again, I was looking at ways of differentiating myself because I thought, What can I bring to the table that will be a value add for my clients? And so I started as an advisor and everyone was talking about, I started hearing about the corporate structure, right? And I was like, How does this thing work? And so I just started studying. Actually, I'll back up one more minute. So my dad's a doctor. So my dad's a physician, he's retired, he's a retired nephrologist, and I grew up watching my dad struggle to make good decisions with his money. Like I grew up in the heyday of cold calling. So he'd get cold calls from, like, stockbrokers and they knew he was a doctor, they'd find his phone number and they'd say, You've got to get in on this penny stock. You know, all this stuff. I remember as a kid going to meet with his stock broker, playing with like, toy trains while he was meeting with his stockbroker, and his stockbroker is telling him how much money he lost in gold that month or whatever. And I remember thinking, like, and I was confused about what my dad did when I was little. Someone asked me, What does your dad do? And I said, My dad's in construction. And my dad's like, What are you talking about? I'm a doctor. And I was like, Well, Dad, every day after school you take us to this old smelly building, we have to put on hard hats, you're telling people what to do. Like, I thought you were in construction. And he's like, No. He's like, my friends and I bought a building and we're renovating it, and we're renting it. And like, so basically what I didn't know as a six year old was that my dad was trying to create a retirement plan through real estate investing. Right? And so when I became an advisor, I started to think, Man, if I could really help people like my dad, like physicians who - I'll generalize a bit - but most physicians I meet, they do enjoy what they do. Obviously, there's high levels of burnout and there's a system that is not functioning very well. But most physicians are very, they really want to serve their patients. They really want to make a difference. They usually enjoy what they do, even though there's good days and bad. And a lot of them don't necessarily want to take on another thing in their life that's going to distract them from their family or their health or their sleep. So a lot of them want to say, Hey, Galen, you know, I trust you. Tell me what you're doing and why, and I'm going to let you manage my stuff and I'm not going to worry about it anymore. So I started studying the corporate structure very heavily. I started meeting with corporate accountants, corporate lawyers. I started meeting with different investment companies that worked with corporate preferred investments. So I just worked really hard to get really good at saying, okay, you're a doctor, you have no pension, What's the best, like, what's the best route that we can figure out for you such that one day you get to flip a switch and you don't have to work anymore if you don't want to. Because you've done all the right things to now be able to retire.

Dimitre Ranev: [00:12:49] Yeah, exactly. And just before we started the podcast, we talked a bit about investing in index funds and just putting money in there. But you were saying a lot of people don't know, Okay, so I'm doing this, but what happens when I retire? Do I have enough to retire if I do this? And how long after that is to be able to do it? So that's that's where you can come in and help figure things out. I was talking to one of my friends who was like, trying to figure out how much he needs to retire to keep his current income. And what he didn't take into account is inflation, right? Like your current income, you have to inflate every year. So it's those little things where somebody who knows what they're doing is really helpful. And I guess my question to you is, so you're saying that about 50% of clientele are incorporated professionals, right? About half?

Galen Nuttall: [00:13:37] Well, almost all my clients are incorporated. Half of them are medical professionals.

Dimitre Ranev: [00:13:43] And, you know, I'm not saying doctors are special, but have you found any differences between sort of your medical incorporated clients and your other professionals? Like do they have anything, any specific interesting quirks or needs that are a bit different, maybe, from accountants or lawyers or dentists?

Galen Nuttall: [00:14:01] Yeah. Yeah. It's a good, it's a good question. So of the last ten clients I've brought on, half of them were incorporated business owners. So, you know, someone who owns a factory or someone who owns some sort of saleable business and then the other half are physicians or osteopath. Brought an osteopath as a client recently, I'd say the biggest, there's not, I mean, the biggest difference from a mechanic's situation is that a business owner can sell their business, and not very many physicians can sell their business, right? Their corporation is basically them, right? Like your corporation is, you know, Dimitre Ranev medicine professional corporation, right? That's, it is you, you are the corporation. So every once in awhile you'll have someone with maybe a clinic or something that they can actually sell, but almost all of my clients are not going to, at the end of the day, sell their business for all this money and then suddenly be able to live off of that. The business owner clients, some of them will sell their business for a lot of money and that's their retirement plan is I'm going to sell my business. The physician, on the other hand, is almost exclusively, you know, what are they going to be able to create an income on their own, whether it be through investing, whether it be through real estate, whether it be through whatever they end up coming up with. So I'd say that's the biggest mechanical difference between the physician and the business owner. Like the straight, like, true blue business owner. From the other side of things, I mean, the biggest thing that physicians have in common is that they typically get a very late start in life due to going from residency where you're not really making a ton of money. You finally start your practice, but you've got $200,000 plus of debt you have to figure out how to pay off. You know, so a lot of physicians I meet aren't really starting to save money until about ten years after a lot of other people might be able to start saving money. So that's the other thing, is there's a very short runway for physicians in general. And a lot of, depending on the specialties, some physicians really don't plan on working long. I have friends who are ER docs who are like Galen, I really don't think my body is going to be able to take work past 55/56. I have clients who are maybe cardiologists or radiologists who say I could probably work to 68, you know, and I mean I'm not picking on them, but it's just the reality, the nature of their specialty. So all that being said, I think that it's so important for physicians to maximize the corporate structure, for physicians to make smart decisions around what they can make, how they can make the most of the corporate structure. Because as we were saying, a lot of people think financial planning, or they think success is paying as little as possible for their investments and they don't know a whole lot else. Like this happens. I meet people and they say, again, I'm really happy with what I'm doing because I know that I'm getting low cost investments, I'm doing index funds, I'm not paying a lot of money, it's really great. And then I'm like, Cool. Do you have, do you know when you'll be able to retire? Do you know if you're doing, are you owning the right kinds of ETFs in your corporation? Because there are some that you should not own inside your corporation, like even at the conference you were showing, Well, don't pick the one that's not a Canadian one because that's going to cause tax problems. And then the whole other conversation is, you know, I'm a big believer, so I think that financial planning for me takes the shape of a tree. So when I talk to people about where they want to be in the future, it's kind of like the leaves at the tips of the branches of the tree and all the work we do for saving money, investing money, saving taxes is growing towards that goal. And, much like a tree needs strong roots, I think a financial plan needs strong roots. And those roots are the protection side of things, like what will happen if you get sick, what will happen if you get injured, what will happen if you pass away prematurely? Like will your tree still stand if that were to happen? Or would your tree fall over? And so, even above and beyond the investment conversation, which is far more complex than just getting the lowest cost investment, there's the whole other side of the coin, which is protecting against what can go wrong.

Dimitre Ranev: [00:17:43] Yeah, exactly. And so my question to you then is with your clients, like, we'll talk about fee structure maybe at the end, but is it sort of like, do you keep them on for long? Like do you see them yearly? What's the usual way you follow up with them?

Galen Nuttall: [00:18:00] Yeah, absolutely. So with my clients, obviously there's a lot of meetings in the beginning, because in the beginning it's very much discovering if like, the first, my first meeting with people is a half hour phone call, and the whole purpose of that phone call is to find out if we're a good fit. Because people have to, I have to be a good fit for them and they have to be a good fit for me. Like I say, I'd say of all the people who call, most people I end up in conversations with, they call me, because they book a time. They hear my podcast, they hear me on someone else's podcast, they book a time and we have a conversation as to whether we're a good fit or not. And I'd say about half of the people I talked to aren't a good fit either. I'm not a good fit for them or they're not a good fit for me. And I'm very picky about, I'm not picky, but like there's a very specific person I want to work with, and other advisors say things like, Well, just bring them on as a client and then if you have to get rid of them later, it's okay. And I don't like that at all. I'm like, I want clients for life. I don't want people that I'm just going to bring on and see if it works. I don't like that at all. So, that's the first step is to make sure that we're philosophically aligned. Like if someone thinks that my job is to beat the market and I can't get them to see what my real job is, then we're probably not going to be a good fit. If someone is, like, a very heavy DIYer who's trying to like get me to join in on their philosophy of market timing, that's not going to work either. There's just certain things that aren't going to work. So, I mean, just since I'm talking about it, like the person that's the best fit for me is the person who is looking for someone to trust. They don't want to do it themselves. They want to understand what they're doing and why. And they want an advisor that's going to patiently explain everything, and an advisor who intimately understands all their options when it comes to corporate investing and understands all their options when it comes to insurance. And someone who's going to be okay with like, yeah, like, I'm not going to try to time to market. I'm not with, with a few exceptions, which I can talk about in a minute. So yeah, so that's the first meeting is to figure out if we're a good fit. Then if we decide we are a good fit, we decide whether we're going to go the fee based planning route or the portfolio management insurance review route, and just depends on the complexity of questions that someone has. So, if someone sends me just a ton of questions like should I be using my spousal RSP, should I be using TSFSAs, how much should I have on side of my corporation? What's an estate freeze? You know, like if someone's got all that going on and they've got quite a bit of assets already accumulated, they're probably going to go for the planning route because if I, if I don't feel confident that I'm going to be able to give them some good solutions without first doing a deep dive into all their structures and everything, then I'm going to say we need to go the fee based route. If someone is maybe less complex and it's a simple retirement plan or they're just starting out, like I have a lot of clients who are just coming out of residency and they're in that year of, Oh, I'm going to incorporate, I'm going to start practice. Like for those people, it's probably, they're not yet a good fit for a plan. So I will take them on and help them in that phase of incorporating, what do I need to do? Like what are some smart things to do with my money? So that's kind of... and then after they become a client, we meet every year at a minimum. We meet any time there's a major life change, like if they buy a house, if they sell a house, have kids. And then I reach out to everyone whenever there's a market downturn--.

Dimitre Ranev: [00:21:13] --I was going to ask.

Galen Nuttall: [00:21:14] So in 2020, I sent, I think in 2020 I called every single one of my investment clients and I said, Hey, you're probably watching the news, you know, or if you are watching the news, we're going to stay the course. And I didn't call everyone this year because when I called everyone in 2020, most of my clients were like, Why are you calling me? Are you going to tell me to, like, sell or buy or anything? And I was like, No, no, no, we're going to stay the course. And they're like, Oh, well, you didn't need to call me. You could just send me an email. I was like, Okay. So then this year I sent an email to all of my investment clients and basically said, We're going to stay the course and why. Or, the one quote/unquote market timing thing is if someone has some tax loss harvesting we can do, which that's another value add a good advisor brings to the table. If you have corporate investments that are in a taxable account and you've actually lost value, let's harvest those losses to offset future gains. Or I said to my clients, if you've got a pile of cash sitting somewhere, I don't know if we're at the bottom yet, but let's start putting some of that money into the market while it's on sale because we're in this, the beginning of this year was one of the five worst beginnings of the year we've ever had. So it's like one of the best five sales we've ever had. Like if you went to buy a car and they said, Oh, in the last hundred years, this is the fifth cheapest this car has been, you'd probably buy the car. So I say to people, like, just put money in and I have a few clients who did have some money kicking around, and they're really happy that they have been putting money in regularly over the last couple of months because they've gotten pretty good returns. And my clients who did it in 2020 got really great returns. I mean, I don't know, as I said, I never know when where the bottom is going to be, and I don't even try to pretend. But when things are on sale, I encourage my clients to buy more. And it's, they've always thanked me for that. So that's things look like when someone becomes my client. And the other thing I'll say is if there is something out there that I think they should know about, like if I've had a client that I think, you know, some private equity stuff makes sense or some market exempt stuff makes sense, we'll look at it. I think there's a product out there that we haven't talked about yet, and I'll kind of, I'll go for a run or a bike or a swim and I'll think about this client and say, Huh, they might be a really good fit for this. Then I'll call them up and say, I was kind of thinking about this, but I'm not moving stuff around a lot. Like that's not not really my style. It's more of a Let's figure out where you need to be, how much you need to put away, and mostly stick to that.

Dimitre Ranev: [00:23:26] So, like, the family doctor of your financial health, you get the annual checkups and and when there is the flu, so the market crashes, you're there to calm things down. So I wonder if it's the process you go through to select your clients that do you have a lot of people sort of calling and freaking out when the market collapses?

Galen Nuttall: [00:23:47] Zero.

Dimitre Ranev: [00:23:48] Interesting. Interesting.

Galen Nuttall: [00:23:50] Zero. Yeah. Nope. Well, part of it is I'm proactive, right? I mean, this year I'm actually mad at myself because I did wait a little bit. I don't really watch the news so I don't always know, I mean, I know enough to know that people are freaking out, right. And like, the news is talking, I call it the apocalypse du jour. And I don't mean to minimize. Like I sent out a newsletter and I posted I think, I don't know I couldn't post on LinkedIn because it was a little too long, but I posted it pretty much anywhere I could post. I sent it to my clients and I personalized it, like each client, you know, the first paragraph was very specific to their situation and the rest of it was the market. People are reacting to world events like the invasion of Ukraine, economic slowdown in China, inflation, all these things. And I don't mean to minimize the impact that those real world events are having on people, and I said the exact same thing in 2020 when I said COVID is having a real life impact on people. Like my dad was one of the first people to get COVID. So, and it was in the early days and we didn't really know what this thing was so it was very scary. So I don't mean to minimize the real world things that are happening, but the people who are reacting to the markets are the ones who are most likely to lose money and the people who are staying the course, as long as the caveat to all that is as long as they started in a good portfolio, they're going to be okay. But if they've got all their eggs in one basket, who knows, right? Or if they've got all their eggs in crypto or one private equity firm, which I saw recently, which kind of blew my mind. I had, I met someone who we did a plan for them and they have every last penny of their investments in one private equity holding. And I was like, This is so insanely risky. Like, and they claim that they're conservative investors. And I'm like, that's another thing I help people do, is they say they're one thing, but they're doing this instead. And so I help them match like what they think they are and what they're actually doing. So, yeah, accurately speaking, I did lose one investment client in 2020. First investment client I ever lost. I wrote everyone and I said, Stay the course. And this person couldn't stay the course. And I said, Fine. So they didn't stay the course. And then in this year, one more client left during the market downturn. But it's a pretty small percentage of my clients. So I shouldn't say no one or zero. There was one each time. So I don't know if that's going to be my average from now on, every time there's a market crash, I lose one client. But I'm pretty proud. I've only lost two in the last three years to that panic because I, you're right. Like it's partially selection and I just help people understand a little bit better. Like one of my first physician clients, I sat down with him and he said, Galen, I am terrified of losing everything in the market, I only want to keep pace with inflation. And this was back in 2013 and he wanted to do like all GICs and stuff. And GICs were like less than a percent or something. And I was like, Why do you feel this way? And he's like, Well, my dad lost all his money with Nortel.

Dimitre Ranev: [00:26:25] Right. Right.

Galen Nuttall: [00:26:25] And I was like, okay. I was like, That is not the only way to invest in the market. And so I showed him a 20 year time lapse of the kinds of portfolios that we're using. And in 08/09, one of the biggest downturns in recent history, I mean, you can find portfolios that only dropped 8% and still did pretty good annual average rates of return since then. So people think, a lot of people think, like I have to be exposed to extreme amounts of risk to be in the markets. And historically, that's just not the truth. Obviously, you typically, like generically, get rewarded for more risk, but that's another big part of what I do with people is I help frame that because sometimes I'll meet people who have sort of a mis, they don't completely understand the markets because they have these horror stories of like an uncle or a dad or whoever. And I'm picking on guys, because guys typically make very brash decisions in investments. They've lost everything in one thing that they did. And they think, yeah, there's research that women make better investors than men.

Dimitre Ranev: [00:27:24] I read that.

Galen Nuttall: [00:27:26] Yeah, it's totally true. Which kind of blows my mind because when you look at all the major investment firms, like the major fund companies and all that, there's not a ton of women on them. And so I'm like, how come if statistically speaking, women make better investors, why aren't there more of them in these boards of like investment fund managers and things like that? So anyways, yeah.

Dimitre Ranev: [00:27:46] Yeah, you're so right because I started my investment journey right after 2008, right? So I was very lucky. Really lucky.

Galen Nuttall: [00:27:53] Yeah. You thought you were a genius.

Dimitre Ranev: [00:27:55] I thought I was a genius. Everything was going up. But I remember talking to people who were, a good 10, 5 to 10 years after they had lost a lot of money, did not go back into the stock market because they're just so afraid. And sure, there is a possibility you lose everything, but that means Armageddon, like apocalypse, like you're not going to be worrying about your retirement plan if the stock market goes to zero. There will be other things happening in the world. So that's great. It's really... Because I think people you know, when I looked at the research for financial planning, the value of financial planning - I talked about this in my presentation - so surprisingly, it was done by Vanguard and Morningstar, which their deal was they sell index funds or mutual funds. So they didn't really necessarily like having financial planners involved, but they found that you guys, if I can say you guys, add some value. And part of it is the psychological thing. So you're there to make sure people realize this is the plan. You're going to retire in ten years. So a drop of 20% right now isn't affecting you. So don't sell everything. That's very valuable. That's probably worth the fee that people are paying if you prevent them from selling all their stocks and never going to stock market for the next ten years. And that's why I want to talk to you today, because I wanted people to know that this existed. Studies in finance are not like medical studies, not rigorous, but there is value to having somebody like you on the team especially, forget about the investments, but the incorporation part, which is complicated. Like I've been incorporated for ten years and I'm still like surprised by some things I learn, right? And having somebody navigate that is really important. So I do have a follow up question because you're very knowledgeable in corporation, but... Is there some?, I've heard about the clichés about why you shouldn't incorporate, but do you practically have clients where you should tell them not to incorporate? Do you have that or do you have clients who have incorporated and you think it was a bad decision for them? And what would make that a bad decision? I'm really curious if you have that experience.

Galen Nuttall: [00:30:12] Yeah, Yeah, for sure. Yeah. And I do want to just echo one thing that you said about the value add of an advisor. The one, the thing that I think that people, sort of the character, the sort of generalization is, okay, I could get 6% with an advisor, but if I cut that fee out, I'm going to get 7% with an index fund. Like because I think the general, like you see these charts all the time where it's like, oh, over the lifetime of your investments, you could save tens or hundreds of thousands of dollars by saving on fees. But that's not the only variable. Like, if that were the only variable, I would totally hang up my hat and say, forget about it. Like you guys go pick your index funds. I just don't even need to be here. That's not the only variable. And then the study that you sent me showed that advisors on average add 3% net of fees value to their client's portfolio. And you say what? Like they, a good advisor will admit that they can't time the market. So it's like, well then how are you making more money? And that's what I say to people is my job is not to beat the market, it's that you would have significantly more money in the future than if you didn't work with me. And if you're like, okay, how does that work? Well, so, it is partially fee, but it's more like you said, like the behavioral side of things. And that 3%, I would venture that if that, if the study they had done were with people with with corporations that had good corporate planning, I think that would be much higher than 3%, especially in Canada, where taxes is such a consideration, either while you're alive or when you're gone. So that's just one thing I wanted to add with that value add is corporate planning, just as one, when you gave your talk that I was there for in Toronto, you were talking about portfolio construction and someone asked a really great question. They said, Are you talking about non-registered or RRSPs? And then you're kind of like, Well, that's a whole nother ball of wax, you know, like a whole nother, like registered versus non-registered is a whole nother thing to know how to invest properly. Anyways I couldn't help but add that to the to the conversation about value added.

Dimitre Ranev: [00:32:05] That's that's the thing, people talk about management fees but your biggest, taxes are the biggest fee you're going to be paying on investments by a lot, by a lot. So if you can get to be tax efficient and I'm not saying like, taxes are important, we all get why we pay them, but if you can be more efficient with the way you pay your taxes, you compound a lot more than if you save an extra 1% fee by not talking to somebody who knows what they're doing.

Galen Nuttall: [00:32:32] Exactly.

Dimitre Ranev: [00:32:34] So that's very important.

Galen Nuttall: [00:32:35] And another thing is debt reduction. That's another big thing that we help people with. Like we oftentimes meet doctors that are very aggressively paying down their debt. They're incorporated, so every dollar they take out of their corporation, they lose $0.30 to taxes, and then they're going to pay off a debt that currently might be at around 4%, I don't know. But it's like you're going to spend $0.30 off taxes to then pay down something that you're accumulating $0.04 per year. We start looking at those things, and I did a plan for some clients who we looked at, they wanted to accelerate their mortgage, they wanted to pay it off in two years instead of five, I think. And we showed them by leaving that money inside of their corporation to compound tax efficiently pre-personal tax, so slowing down their mortgage just by a few years, they were going to have an extra $2 .illion in retirement. And that $2 million means extra trips, bigger legacy, you know whatever that looks like for them just by that one thing of like being really smart with how they take their money out of their corporation. So I can now, I think, answer the corporation question.

Dimitre Ranev: [00:33:35] Yes. And I'll get back to that issue you're talking about. Go ahead.

Galen Nuttall: [00:33:38] Yeah. So I was on another podcast recently and they said, like, I'm not in the financial planning group for physicians because I'm not a physician. But one of my clients did say, like, there seems to be a hot topic in there. I mean, there's a couple of hot topics in there. One would be should you own occupation disability insurance or not? Like I've heard that that's kind of a big thing. Whole life insurance obviously is a huge, divisive, polarizing topic. And the other one was whether you should incorporate or not. And I was like, this is really like, or even if if you should incorporate or not. And I was like, I mean, all my clients are incorporated. The times when I would say that someone doesn't need to incorporate or doesn't need to rush to incorporate, at least from a financial planning standpoint, like incorporation has a legal and an accounting standpoint, I'm going to talk about the financial planning standpoint. So if there's a legal or an accounting reason, that's not what I'm talking about. But from a financial planning, investing, savings standpoint, typically if someone is spending every last penny they make, it doesn't make sense for them to incorporate because you're not really, like the government a few years back there's a thing called integration where basically what they said was they didn't want people to be able to earn money into a corporation, then bring it out personally and be better off than if they didn't have a corporation. Right? They didn't want to penalize people who couldn't incorporate. So they got really, you know, certain things like you used to be able to pay yourself a dividend that you'd save a little bit or you'd sprinkle money to your kids and split income with your spouse, like there are all these things that are really quite diminished now. So like if I meet a physician and I haven't met, I mean, I don't, I mean if I meet a physician who's very early on and they say to me, Galen, I do want to pay down some debt aggressively, I need to buy a house, I need to buy a car, you know, it's my first year in practice, I might say, You know, don't be in necessarily a rush to incorporate if you think you're going to spend everything you make. Because basically you're paying a fee to incorporate from a legal standpoint, you're paying a fee to file your corporate taxes and your personal taxes. So it's like, do you really need that extra cost, which isn't a ton of money, but it is money and it's like, is it worth it? But the vast majority of physicians, I mean, it makes complete sense for them to be incorporated. Although I will say, like I give a talk about incorporation and I say a corporation can either act as a sale that you add to your financial ship that speeds you forward to your destination or an anchor that slows you down from getting to your destination. And the anchor comes into play when people save money inside of their corporation and they don't do anything with it, or they put it into something like a GIC where they're going to lose half of the growth to taxes or they put their money in something like US dividend bearing stuff where they're going to get, the growth is going to get penalized and all these other things. So like the caveat to the generic rule of thumb that I, the accountants that I know say, if you don't need the money, leave it in your corporation. But far too often I meet people who leave it in the corporation and they don't do anything with it. And it's like, okay, you save taxes, which is nice. But there's also this thing called inflation that is eating away at the power of your money if you're not doing anything with it or if you're just invested in very conservative things, you're losing half the growth of taxes and you're not even keeping up with inflation. So that's the caveat to it all. Like you want that corporation to act as a sail. Tax efficient things that are going to push you towards your goal, not like these inefficient things that are going to be an anchor.

Dimitre Ranev: [00:36:43] I mean, how much do we lose in inflation, what, eight, 8%, -8%, just keeping it? More than that.

Galen Nuttall: [00:36:49] Yeah. Inflation, like, yeah, depending on how you calculate it, there's a lot of obviously a lot of talk out there as to how we calculate it and whether we should calculate it. But I mean, at the end of the day, there's ways to achieve tax efficient compounded growth inside of your corporation where it's pre-personal tax. And we've already talked about this, but I mean I'm going to hammer it into the ground, is that every dollar you take out of your corporation like you're losing quite a bit to taxes. And I get why we pay taxes, I'm not saying we shouldn't pay taxes, but if you have, the beauty of the corporate structure is the flexibility on how you pay yourself. Because if someone's just an employee, like if I were, if I'm an executive, well, I'll just say this, if I'm an executive at IBM and I'm not incorporated and the government pays me 350,000 a year salary, I'm going to lose so much of that to taxes. If I'm a physician with a corporation that bills 350,000 a year and I only need to live off of 90, I get to keep a whole bunch of money pre-personal tax to compound for me for the future. So it's really a, I mean if you use it effectively, it's it's an incredible bonus.

Dimitre Ranev: [00:37:52] It's a gift. It's a gift. I mean, I keep saying this, it's a gift to physicians. And I would add the GICs are doing slightly better this year because interest rates.

Galen Nuttall: [00:38:01] Yeah, GICs, they're looking great. I mean when GICs go up, mortgages go up. So you'd have to see. Like I have a client that got a mortgage yesterday for 3.6%. And the mortgage that I got five years ago is like 0.95. But that's back when GICs were doing like 0.85 and now GICs are doing 4.5. So, I mean, actually, yeah, I won't go much into the mechanics, but we are going to see a huge shift in how returns are achieved in the markets because for the longest time, none of our, next to none of our return came from fixed income, for like a very long time. Because things like GICs and treasury bills and all these things that used to sort of prop up a portfolio, were doing nothing. So you had to get all your money from, or most of your returns from higher risk stuff. So it is going to shift a lot of how we get our returns, at least for a little while.

Dimitre Ranev: [00:38:49] I think that's what's so, yeah, that's what's so exciting.

Galen Nuttall: [00:38:51] Yeah, it's all a spiderweb. Like one thing moves, another thing moves, like it all, it all kind of moves together.

Dimitre Ranev: [00:38:56] That's what I love about the market. It keeps shifting and going around. I just want to finish off by saying the whole debt thing, because so I come from Eastern Europe, right? And communist country, right? So that was like a sin. Like it's, you don't go in debt, credit cards. I remember when I when I came to Canada, credit cards were like the devil, right?

Galen Nuttall: [00:39:20] No.

Dimitre Ranev: [00:39:21] And the thing about it, and that's why it helps to have somebody talk to you through things about your belief systems, is there's some bad debt, but there's some good debt. And that's where talking to somebody like you, where you can actually show the math of what bad debt is and good debt is, and and change that belief system, which is untrue, is very valuable. So I want to thank you for taking the time to talk today. I hope I can have you again. I think you're very knowledgeable and you explain things very well. And I have so many questions for you. Is there anything you want to add before we end the podcast? I have so many questions, but we we have to keep the time.

Galen Nuttall: [00:39:58] Yeah, yeah.

Dimitre Ranev: [00:39:59] So I know that you might be training to run a triathlon. So if that's still the case, I wish you all the best, I wish you good luck and thank you for your time today.

Galen Nuttall: [00:40:08] No, thank you so much. This was great.

Dr. Kevin Mailo: [00:40:11] Thank you so much for listening to the Physician Empowerment Podcast. If you're ready to take those next steps in transforming your practice, finances, or personal well-being, then come and join us at PhysEmpowerment.ca - P H Y S Empowerment.ca - to learn more about how we can help. If today's episode resonated with you, I'd really appreciate it if you would share our podcast with a colleague or friend and head over to Apple Podcasts to give us a five star rating and review. If you've got feedback, questions, or suggestions for future episode topics, we'd love to hear from you. If you want to join us and be interviewed and share some of your story, we'd absolutely love that as well. Please send me an email at [email protected]. Thank you again for listening. Bye.

Dr. Kevin Mailo welcomes Marlies van Dijk, founder of Alberta Health Services Design Lab and Lead of The Pivot Group, to the podcast to talk about human centered design and how to truly innovate for change in health care.

Marlies felt a restlessness in her nursing career that became the realization that she couldn’t influence the change she wanted in the places she was working. She moved jobs a lot, constantly innovating, and then came up on human centered design thinking and started the Alberta Health Services Design Lab. Marlies truly desires innovation that affects change in real ways.

In this episode, Dr. Kevin Mailo and guest Marlies van Dijk discuss what the three box solution to effective innovation looks like, why true change must prepare to bump up against organizational inertia, and how Marlies balances delivering results in her day job while pushing for new change on the side. She addresses how to safeguard time, why not joining committees that are the same old bureaucratic process is better for her, and shares very practical ways to communicate with immediacy between the members of your team. 

About Marlies van Dijk:

Marlies van Dijk currently leads The Pivot Group. Marlies is a registered nurse and has worked as an innovator and change agent in the health and care system. Her most recent experience was as founder and leader of the Alberta Health Services Design Lab. She led this to design new service models across all corners of the health care system. Prior to that she worked in British Columbia to improve care across 25 hospitals in 7 health authorities. She has worked with many national healthcare organizations to improve health care and services. Her passion is co-design as a way of working and hopes to apply her skills to the creation of a world class eating disorder treatment facility with clinicians, patients, community, and government. 

She loves the outdoors and feels most alive when she is on her bike (yes, she is Dutch too!)

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Physician Empowerment: website | facebook | linkedin

Marlies van Dijk, RN and Lead of The Pivot Group: the pivot group | the design lab | linkedin

Transcript:

Dr. Kevin Mailo: [00:00:00] Hi, I'm Dr. Kevin Mailo and you're listening to the Physician Empowerment Podcast. At Physician Empowerment, we're focused on transforming the lives of Canadian physicians through education in finance, practice transformation, wellness, and leadership. After you've listened to today's episode, I encourage you to visit us at PhysEmpowerment.ca - that's P H Y S empowerment dot ca - to learn more about the many resources we have to help you make that change in your own life, practice, and personal finances. Now on to today's episode.

Dr. Kevin Mailo: [00:00:34] Hi, I'm Dr. Kevin Mailo, one of the co hosts of the Physician Empowerment Podcast, and today I'm very excited to introduce to you Marlies van Dijk. And Marlies is... you know, Marlies, before I talk about you a little bit, I'm going to say it's a little hard to kind of describe what you do because you do so much and you've had such an incredible career and you've built so much. But Marlies is the founder of Alberta Health Services Design Lab, which is kind of an in-house console consultancy for the Alberta Health Services health care system, essentially for Alberta to help on leadership and direction. But then, as Marlies has grown as a leader in health care, she's now stepped out and formed the Pivot Group, which is nationwide. Super exciting. And every time I talk to Marlies, I'm learning something, I'm inspired, and I am so, so glad Marlies, to have you here today. So can I get you to just start with a little bit about yourself and your journey and how you got here?

Marlies van Dijk: [00:01:39] Yeah, for sure. Thanks for having me. So I started out in nursing and I realized very quickly that I was a cog in a wheel and that I could not influence the change that I wanted to make. And I started working in the nonprofit sector, working grassroots with marginalized communities. And I absolutely loved it. But I quickly felt that I wasn't growing there either. So I went back to the health system and I started leading large scale change initiatives with national organizations, things like, say, for health care now, etc.. And then I went to British Columbia for a while. So I change, you know, quote/unquote, jobs every five or six years. I'm not one of those lifers, which I'm very proud of.

Dr. Kevin Mailo: [00:02:24] I am inspired by the way. Inspired by the way. Keep going.

Marlies van Dijk: [00:02:29] Yeah. No, no pension is going to hold me down for life. There's no way.

Dr. Kevin Mailo: [00:02:32] Good. I love it.

Marlies van Dijk: [00:02:34] And I ended up in British Columbia working with surgeons across the entire province in 25 hospitals. And once I was finished that I came to Alberta and I was given a job because I was creative and I was like, What creative? I kind of know I'm creative, but not like in the traditional sense, like compared to really creative people, I'm pretty straight. But in the health care environment, I think I do stand out a bit that way. So I came to Alberta Health Services and I thought, Well, what am I going to do here? And then I realized there was a gap in the market inside the organization. There was a lot of improving best practice or implementing best practice, closing the gaps. But innovation was, per se, was no methodology for innovating. They talked about it, like I mean, thousands of people have the word innovation in their title, but actually doing it and how do you do it? So I stumbled upon a human centered design, design thinking, and I studied labs across the world and I said, Yeah, this is what we need to do. We need to create a design lab. So yeah, go ahead Kevin.

Dr. Kevin Mailo: [00:03:45] Tell us what human centered design is. Because, you know, the first place I kind of go is patient centered, But we realize that we're ignoring another part of that equation, which is health care providers and frontline staff. So tell us what human centered design means within our health care systems and talk to us at everything from the clinic level in private practice all the way up to large subnational health care organizations.

Marlies van Dijk: [00:04:12] Yeah, I can give you some examples that makes it more tangible. Human centered design is essentially a methodology that's pretty high level that looks at collaboratively making decisions about a product or service that would meet the need of the user. And usually it's out of the box. It is something that hasn't been thought about. We use a lot of analogies from other industries to gain inspiration, but the method is really that walks you through testing, building prototypes, and creating something that which you can feel fast with. So that's human centered design. Examples of, for example, I just came from Vancouver and we led a two day skunkworks project and we called it Hacking Wounds - the year before, Hacking Pain - where we essentially take 75 to 100 people, clinicians, diverse teams who tackle a problem from a different angle and try to come up with unique solutions and test them right then and there. You know, failing in health care is difficult to do because of the stakes, but we also put way too much time into our work six months, 18 months before we actually test it with our users or patients. And so failing is not an option because we've put this much money and time into things, like it's cost us.

Dr. Kevin Mailo: [00:05:36] The cycle is so long.

Marlies van Dijk: [00:05:39] It's so long. Yeah.

Dr. Kevin Mailo: [00:05:40] When I think about starting my companies, it's like, Oh, try something. And if it doesn't work, try something else. But that happens very quickly and at low cost, right? Because as you said, the stakes are high in health care because we deal with patient care.

Marlies van Dijk: [00:05:54] Yeah. And I think human centered design is a method that that is a - well, it's well known to be the innovation method - but we haven't created a lot of space for people to work in that way, in part because we're all about evidence based practice, return on investment, you know, show me the impact.

Dr. Kevin Mailo: [00:06:12] Productivity, output, volume, measurable. Quantifiable.

Marlies van Dijk: [00:06:17] Yeah.

Dr. Kevin Mailo: [00:06:19] Values.

Marlies van Dijk: [00:06:21] Exactly. And I mean, if you look at the three box solution, which I'm a big fan of, which tells you that future customer base is future models or delivering service, you have weak signals telling you something might be doable, but you're not 100% sure. Like, you know, virtual care. Before COVID, we were like trying to ignore it at all costs, right? The US had embraced it long before us, but now we're actually finding that, oh wow, we can actually provide the care virtually in many circumstances. But why did we not look at that sooner? We know it's more cost effective. People don't have to travel. But it's, in essence, we haven't cultivated the space for us to innovate because it's a different skill set than implementing, you know, evidence based practice where you know, what needs to be done. You have a list, right? It's proven and future work and delivery models are not proven yet.

Dr. Kevin Mailo: [00:07:21] And talk to us about the three box approach just in brief. I mean, I just love new ideas out there and get people to look at the world differently. Not in any great depth. Tell us, give us an overview.

Marlies van Dijk: [00:07:34] So three box solution, which I'm in love with, is incredibly simple. So if you Google it, you'll find some great videos. The author talks about we have box one, that's day to day operations. It's what, you know how to operate a hospital. You know how to deliver services at scale. You know your business. We're very good at that. Box two is what is it that you can let go of to create the space to actually look at new service models and new potential future customers? So that's the letting go of phase. You know how we have trouble letting go of things? Everyone does. So you actually have to take some time to figure out what you can scrap so you can create space. And that third box is really about - and he says it should be between 10 to 20% of any organization - should have dedicated resources and people that look at weak signals. There is no recipe, there is no proven methods for how we're going to move forward, because most of our problems are very complex, right? We're not dealing with just taking out an appendix for most of our health issues. We're talking about chronic disease management, delivering care to rural communities. Those are complex problems that it all depends on the local resources to know how you're going to navigate that. So that's a quick summary of the three box solution.

Dr. Kevin Mailo: [00:08:56] I love that. And let's shift gears a little bit. And one of the things, so Physician Empowerment, we host a lot of educational events. We've got monthly small groups with a small group of physicians where we tackle aspects of practice or health care or finance. We also have our national conferences and other events like that. And, you know, whether it's in the formal discussions or a hallway conversation, you know, somebody next to the coffee urn is talking about the culture of large organizations. And specifically what I'm getting at is the struggle to overcome organizational inertia. Right. Like an object at rest wants to stay at rest. And so, you know, and it's a source of burnout. It is because I've heard many physicians, especially kind of mid-career, you know, 10 to 20 years in where they came into the profession, they came into health care - and this applies across the board, it's not specific to physicians - they've come in with a certain energy, a certain zeal, a desire to go beyond patient care, to build better systems, to improve delivery, and being people centered is part of it. And they come up against organizational inertia. And I've heard this from doctors coast to coast. I hear it from American physicians as well. And so what does a physician in that position do when she or he is in a leadership role and they're trying to say, okay, how do we break past this organizational resistance to change? Even thinking about new ideas, it's not, you know, it's not even a case of like getting to change and taking steps and trying something new. It's like even having the discussion of could we do things differently? It's like we're going to shut that down.

Marlies van Dijk: [00:10:54] Yeah, well, I've lived it my whole life up until very recently. I've survived in the health authorities across Canada until now, and I decided to leave on my own fruition, believe it or not. But a couple of things. And I of course, I'm super passionate about this, but the first thing to know is you need to find some others who are like you, which sounds easy, but it's not, right? You need to find some fellow, and I call them rebels. I know for some people that might be too much, but you need some people who are innately dissatisfied with the status quo. But they are hopeful because if you're dissatisfied with the status quo and you are miserable and don't see any hope, then you know that's not fun to work with. So you need people who have not given up the spirit. I also have learned over time that you have to avoid the formal structure of a health organization. You have to do it on the edge. This is not something that's going to be in an operational plan. This is not going to be approved by the CEO with the multi year implementation plan. Real change happens on the edge where you start small with a group of people and see if it has some legs before you start talking about it. And that is hard to get your head around in the way that you feel like you're manipulating the system, which is exactly what you're trying to do. You also need to really embrace the fact that you're not going to be super popular. I knew from day one that people thought I was a loose cannon, wildcat, tornado. You know.

Dr. Kevin Mailo: [00:12:34] All compliments, by the way, as far as I'm concerned. All compliments. I love it. Just keep rolling them off.

Marlies van Dijk: [00:12:39] I remember talking to a leader and I said, hey, I want to do this. And she said, Walk to the elevator. She goes, Marlies, two suggestions for you. Watch your back, first of all. And second, you need to learn how to walk before you fly. She opens the elevator, steps in, and goes up. And, you know, I stood there and I said, No way in hell am I not going to fly. So you have to really believe in yourself in the sense that you can, that you're not going to back down to keep the job, to keep the pay. Although I have to say, I have really focused and I've told you this earlier, people said, how come you haven't gotten fired? Like, how is this possible?

Dr. Kevin Mailo: [00:13:19] Love that. Love you.

Marlies van Dijk: [00:13:20] And it's an interesting question. I, I think I really, the reason I've survived is I'm quite a doer. I'm action oriented, so I deliver. So I've always made sure that I'm focusing on something that people know, Oh, Marlies does that. Oh, she delivered that. Yet on the side, I do my innovative stuff and I change stuff. So I make sure that I'm not just all about innovation and trying new things. I actually have a day job. And on the side is where you try these new things. And then the very last thing that is really worth mentioning is accepting this fact that people might not like you, they might think you're likable, like I think people think I'm friendly and they can laugh with me, but they know it's, you know, they're not quite sure what to make of me.

Dr. Kevin Mailo: [00:14:09] It's coming.

Marlies van Dijk: [00:14:10] Right. They're like, Oh, God, what's she going to say? Yeah, but managing the discomfort and being really, like, comfortable with getting the answer no. Like, I didn't care. Like, I would get ten no's, I didn't care. I'm like, Yeah, okay, I knew that was coming. All right, go around this person. Go talk to so-and-so. I'm going to manipulate so-and-so and I'm going to talk to so-and-so. And I was continually navigating.

Dr. Kevin Mailo: [00:14:35] It's a hustle, It's a hustle. I love it. It's a hustle.

Marlies van Dijk: [00:14:41] Right. It's a huge hustle. And some people aren't hustlers. I am a natural hustler, like I am an extrovert.

Dr. Kevin Mailo: [00:14:50] I am totally a hustler. Love it. Yeah. You and I are very much on the same wavelength.

Marlies van Dijk: [00:14:56] Yeah.

Dr. Kevin Mailo: [00:14:56] Yeah.

Marlies van Dijk: [00:14:58] And so, I mean, I think I also knew that I would get down, like there was times where I was completely deflated, demoralized, burnt out. But I took those those times to recharge and to forgive myself for not succeeding and to lay low for a little while. And then I knew my energy would always come back. And it did again and again. So I just was sort of watching my cadences. And I also knew with my supervisors, because I did have them, believe it or not, that I would need to make them happy too, and make them look good. And I, I focus on that quite a bit. But then, you know, I would time my jabs or time my challenges so that I wasn't burning out my supervisors with me as a nutbar employee. But actually, you know, she's delivering. Oh, and it's worth listening to her at times when the message isn't what they wanted to hear.

Dr. Kevin Mailo: [00:15:55] I love that. And I think it's also important, as we're trying to invoke change, is to focus on core values. Right? Like this is about making things better for patients and frontline staff. I feel like that's always a centering, that's always a great centering point. It's like, listen, I know we're disagreeing here and I know you didn't want to hear it, but I'm just trying to tell you that this, from my perspective, is a step forward in patient care or a step forward in caring for our burnt out frontline staff.

Marlies van Dijk: [00:16:30] Right. And just even to build on that, doing a 'Yes and', is people quickly realized I wasn't a climber. They knew, once they realized that I was not there to try to climb the the bureaucracy which is what most people are into, let's just be honest.

Dr. Kevin Mailo: [00:16:46] I'm not. But yes I get that.

Marlies van Dijk: [00:16:53] Yeah. Yeah. Yeah, exactly. So once people realized I wasn't in that game, that's a whole other game, you know, that's a Game of thrones. Like, you know that, like it's like, it's cutthroat, killer. I wasn't part of that. So, for example, if I did a project and I wasn't acknowledged or I wasn't thanked, I didn't care and I honestly didn't care.

Dr. Kevin Mailo: [00:17:18] You know what, though? Clearly you're making waves because here you are on the podcast, right? Right. But I mean that, I mean that, right? Because actions speak louder than the words of an email or some little placard or whatever have you.

Marlies van Dijk: [00:17:33] Well, and I think too, I started to realize you could influence without being high up in the hierarchy, even more influential potentially. And they talk about the 3% influences 80% of the organization. You can be an influencer without that position. And so I when I first came to Alberta Health Services, I started tweeting, and I was like, Why is no one talking outside of the formal email process? And that was fairly new in 2015 and comms just talking about we can do better. And health care suffers from X, Y, Z. I have been told by the communications team that I walk the line just right, just a fine line. I say enough about generally speaking and health care. I don't point fingers. But I learned how to be critical yet hopeful and not pointing fingers. So just that wasn't a role navigator. And so my voice mostly came to me through social media. I didn't wait for a committee meeting or something, you know.

Dr. Kevin Mailo: [00:18:42] Oh, exactly. Right? And I think the other thing is, is focusing on actions, not individuals when we're directing criticism. Right? Or focusing on the process, not on the individuals that set it up or run it, because that gets very emotional when we personalize like that. And there really isn't any role for that. Do you know what I mean? Like.

Marlies van Dijk: [00:19:03] No. Absolutely.

Dr. Kevin Mailo: [00:19:04] I don't think it moves anywhere when we start getting into finger pointing.

Marlies van Dijk: [00:19:09] Exactly. And I also think, to build on that, is I was invited to many committees and I actually have a rule that I don't join committees on a regular basis, like I'm not a member.

Dr. Kevin Mailo: [00:19:22] You'll come in, you'll speak.

Marlies van Dijk: [00:19:23] A committee land for me is like, no, no. But I got invited to an innovation committee and I was like, Oh geez, I'm innovation. I guess that makes a lot of sense. And oh, there's a there's some VP's there. Oh my God, VP's this is Whoa. I went to the first meeting and I realized this is nothing about innovation. This is just another bureaucratic process of committee meetings. And I knew that the end game, there was nothing there. I could sense it. And so I actually resigned from the committee after the first meeting. I wrote a nice note. I apologized, but I'm --

Dr. Kevin Mailo: [00:19:59] Yeah, powerful. You know, you're your most important resource.

Marlies van Dijk: [00:20:02] Yes. My time is really important.

Dr. Kevin Mailo: [00:20:03] Where are you gonna spend your time?

Marlies van Dijk: [00:20:04] Yeah, yeah.

Dr. Kevin Mailo: [00:20:06] I love it. I mean, it's wisdom for all of us in health care. We're the rate limiting step. If I'm busy translating the Bible into Klingon, I'm probably not doing something else more important.

Marlies van Dijk: [00:20:20] Yeah, it's easy to get sucked into the way things, the way they design change. And I, somebody in the hallway saw me shortly after that, and they said, How did you get out of that committee? I want to do that too, but I can't. And I said, well--

Dr. Kevin Mailo: [00:20:36] You run a course on that.

Marlies van Dijk: [00:20:38] -- why can't you? Like, let's get real here. It's all a figment of our imagination. What's happening there? Like, it's just fluff. And I just made really careful calls on that without, you know, offending anyone.

Dr. Kevin Mailo: [00:20:52] I just say I think I'm more effective not being on the committee. Right. Like, politely declining. I like that.

Marlies van Dijk: [00:20:59] Yeah. And call me, call me when you need me. I'm here.

Dr. Kevin Mailo: [00:21:02] So talk to us about practical ways to communicate. And let me just send my big gripe. I hate email. I think it's a giant step backwards in human communication. Like I feel like spoken language, written language, the printing press, really great developments in human evolution. Email was like a step back because how do you address a complex issue going back and forth over an email string with like five other people on it? Right? So for those of you that email me personally, you'll find that I have on my signature line a little thing that says, I never check this, I'm real hard to get a hold of. And so I'm old fashioned. I want to pick up the phone or go meet with somebody because if it's something complex, it's probably best addressed that way. But that's just one example, and that's my own personal perspective on it. I mean, in the end, yes, emails have to go back and forth and in the end there has to be some kind of formal written summary of what was said, what was decided at meetings or whatnot. But in the end, I think we're just so much more effective when we communicate verbally or face to face.

Marlies van Dijk: [00:22:08] Right.

Dr. Kevin Mailo: [00:22:08] So talk to us about some very practical approaches. I mean, we covered some of them, but I want to hear more because this is, these are the things that that courageous health care leader listening to this podcast who wants to do more, wants to get out there, wants to begin hustling to improve their health care system, but what does she or he need to really hear on the how? You know. What do they need for tools?

Marlies van Dijk: [00:22:31] Well, I always, you know, made it my mission to get, to have a relationship with the highest person in the organization. And you can imagine that wasn't going to happen through email. So I would use Twitter or LinkedIn. So DM people directly. And ultimately texting is of course, my love. But I, you know, my teammates at Pivot, we communicate through Discord. You're probably wondering why, we just picked Discord because some people are on it. And actually I love it. It's instant. But of course I'm not in a health organization. But when we were in a health organization we used, of course, Slack, and methods to communicate quicker about logistics. Like you don't want to email logistics. That's just painful. Right? But I did have one of my teammates say, You know what? I got a text from you, I got a tweet, I got a...

Dr. Kevin Mailo: [00:23:26] There we go.

Marlies van Dijk: [00:23:27] And I was like, Yeah, this is yeah, I am a little bit intense at times. Answer me, no. So I think just also what I've learned is just having fun with your teammates like at the design lab, we were like family, like it was crazy. We fought like cats and dogs and and still loved each other. So being able to create a relationship in your team where you actually really like each other and appreciate each other for who you are allows you to work much faster because you can say, Oh my God, I'm sorry, but this PowerPoint needs some help. People don't want to give negative feedback very easily. And we talked about radical candor on my team and we would have to detox people when they joined the lab because they were, the bureaucratic detox, right. Like, and the first time someone, you need to be able to challenge the boss. If you're not challenging the boss and your team, you do not have a psychologically safe team and your products are probably crap. Because no one wants to say, Hmm, I want to--

Dr. Kevin Mailo: [00:24:34] -- throw this one in the trash. Let's start over.

Marlies van Dijk: [00:24:36] Yeah, Yeah. And so I have, I think people, I've been told have never worked for someone who gives this kind of feedback, like, ever. And I'm like, Wow. Like, do we just go along and say, good job? Good job, employees, you're awesome. And yet the work is shit and you know it. So intervening early to create that iterative feedback about what about this and what about this and how can we make this better? I think it's a culture of where you can, everyone can improve the products you produce because I've seen in formal systems people can work for eight months on something and it's not good, but it's too late to comment because you've spent that much time.

Dr. Kevin Mailo: [00:25:19] Yeah. It's like a rocket that's never going to launch. I'm never going to launch properly.

Marlies van Dijk: [00:25:25] Right. And I think the Gantt chart and the project management planning for complex problems is an absolute joke. It's like it's a human system. You think you're going to map out for six months what you're going to do? Like what planet are you from? Like, that's never going to happen. So I have a joke on my team, like if a leader is really into Gantt charts and project management, go to Google. There's tons of templates. I want you to spend half hour on a Gantt chart, make it look good with colors. They love red, blue and yellow for some reason. Do a dashboard, put it in front of their faces and they'll come right down, like they see order. They see a plan. Because that's what we're trained, we're trained to think, you know, and good business etiquette is a plan. And so, I mean, I'm sounding horribly manipulative, but that's how we kind of work. We feed the the top, you know, a really canned project management plan. And then underneath you work more in an agile way where you're not living to that Gantt chart because you know you're going to get information within two weeks that's going to throw your whole plan into the garbage. So we play the game. You have to play the game on the outside and have another game on the side.

Dr. Kevin Mailo: [00:26:41] Love it. Now, here's one more one that I'm going to put you. And I think we can just keep going because I absolutely love this. Absolutely love it because I'm passionate about seeing health care done better. You know what I mean?

Marlies van Dijk: [00:26:54] No, I get it. Yeah.

Dr. Kevin Mailo: [00:26:56] Let me be blunt. Let me let me follow your path. When we talk about closing down beds because we don't have adequate staff, that's kind of like the airliner that you're about to board, that you're boarding, it's about to go for a transatlantic flight, and they're like, oh, by the way, three out of four engines are working and we're down a few crew members, but we're pretty confident we're going to get through our transatlantic flight, you know? So I'm passionate about seeing things done better. And yet the issue is that I feel like health care is always in crisis. I mean, you know, there's no margin within the system. And I hear this coast to coast from Canadian physicians who are like, yeah, I want to do change, but as a leader, I'm putting out fires all the time, right? As an organization, we're putting out fires all the time.

Marlies van Dijk: [00:27:47] We're designed. Yeah, we're designed to not be in the news. That's what we're, that's how we operate. How can we not have a headline that makes us look bad?

Dr. Kevin Mailo: [00:27:56] Yeah. So how do you get past that? That crisis in front of us a week, a month ahead from now, and really make space mentally, emotionally and in our calendars for real change? Do you have any ideas?

Marlies van Dijk: [00:28:14] Yeah, it's a really tough one. If you are a full time clinician, it's going to be hard to carve out space because the mountain of work and the mountain of people is just growing of who needs to see you. So maybe going back to that three box solution, finding out what you can let go of and actually creating time and space to be, to bring bring people together to look at different ways of skinning this cat. We're holding on to old models, right? Old models of delivering service. It's clear we cannot ensure that every Canadian has a family physician. I know that might be like a gas for some people listening, but with chronic disease rise the age, the cost of the system--

Dr. Kevin Mailo: [00:28:59] Oh if you've seen what I've seen in the ten years that I've been in practice or so, I say, Wow, it really, really changes. I mean, sorry, I'm just going to interrupt because--

Marlies van Dijk: [00:29:08] Yeah, yeah.

Dr. Kevin Mailo: [00:29:09] Like you get a young person, like in the emergency department where I work, you know, a young person, 25 years old, has a fall. I mean, you may, they may dust themselves off and you may examine them, they may not require an x ray. Right? And yet, if that same person was an 85 year old on a blood thinner that has a fall, like they're getting a lot done in the emergency room. Yeah, a lot of time there. And then they're getting admitted. Right? And so, you are absolutely right when you talk about like, how are we going to, how are we going to service an aging population with a growing list of chronic diseases?

Marlies van Dijk: [00:29:46] Yeah, it's going to like, you know, I'm from Europe myself. I grew up there and I go there a lot. And, you know, when we're spending 85% in the last year of life, we need to start asking ourselves is, is that what we should be doing? And what about, what could we not potentially do and how do we navigate that? Why are people dying in the ICU? I've heard numbers up to 84, 85% of non reversible deaths are happening in the ICU of acute care facility. And it's like, that's $4 / $5,000 a day when it was not reversible. We know these things, right? So, I mean, there's, this is a huge conversation, but...

Dr. Kevin Mailo: [00:30:28] These are big conversations. But it starts by having the conversation for change.

Marlies van Dijk: [00:30:35] And to challenge people. But I think in the end, making sure that you don't burn out is number one. Tackling something that you can make your project that you get some satisfaction from because you say to me, oh, you've done so many great things and I feel like I've barely done anything. Like I'm hard on myself. And most innovators and entrepreneurs and change agents are. They're like this is pathetic. What have I done? And that is the part about being a change agent. Like, I remember seeing one of my VP's in the cafeteria one day and I was talking to him and I was like, on fire. I was in a great mood and all of a sudden he goes, Wow, are you not happy in your job? And I said, What? What are you talking about? And then I realized, Oh, no, this is, I'm wired this way. I'm dissatisfied with the status quo, but I'm willing to tackle it. But he wasn't used to it, like he he thought, you know, he was surprised that I sounded the way I did. So that is, that is definitely a criteria for being a change agent, that you're not happy.

Dr. Kevin Mailo: [00:31:47] I love it. I absolutely love it. Marlies, I want to just keep going. But I know we have to wrap this up, which just means we'll have to get you on again to talk about these issues because there is such a hunger out there with physicians who, you know, physicians and other health care providers who are passionate about what they do and the system they work in. And they want change. They want tools. And you often feel alone in this, but you realize you're not. And the wisdom that I'm going to, I'm going to take away is, find those allies, find those people that are like minded as yourself, and begin to connect with them and see what you can do to start the conversation.

Marlies van Dijk: [00:32:28] Yeah. Find your wolfpack.

Dr. Kevin Mailo: [00:32:30] Yeah, I love that. Love it. So again, Marlies, I really want to thank you. And for those of you that are interested, again, it's The Pivot Group that Marlies founded, which is her national consultancy, and it's really incredible.

Marlies van Dijk: [00:32:44] Thanks for having me, Kevin.

Dr. Kevin Mailo: [00:32:45] Thank you so much.

Marlies van Dijk: [00:32:46] Bye.

Dr. Kevin Mailo: [00:32:47] Thank you so much for listening to the Physician Empowerment Podcast. If you're ready to take those next steps in transforming your practice, finances, or personal wellbeing, then come and join us at PhysEmpowerment.ca - P H Y S Empowerment dot ca - to learn more about how we can help. If today's episode resonated with you, I'd really appreciate it if you would share our podcast with a colleague or friend and head over to Apple Podcasts to give us a five star rating and review. If you've got feedback, questions or suggestions for future episode topics, we'd love to hear from you. If you want to join us and be interviewed and share some of your story, we'd absolutely love that as well. Please send me an email at KMailo at PhysEmpowerment dot ca. Thank you again for listening. Bye.

Dr. Kevin Mailo welcomes Dr. Mandy Brisebois, physician and Certified Health and Wellness Coach, to the show to address the reality of interpersonal conflict and how to resolve it. Dr. Brisebois specializes in helping practitioners work through conflict and shares her experience with listeners. 

Dr. Brisebois clarifies that conflict is the end result of missing the boat on necessary steps that come beforehand. She identifies that communication, collaboration, aligned expectations, and knowing each other’s goals are all conversations that should be happening amongst colleagues in order to avoid clashes. However, knowing how to resolve conflict when it does arise is vital, especially in pandemic times of stress and overwork.  

In this episode, Dr. Kevin Mailo and guest Dr. Mandy Brisebois discuss how to address conflict or tense exchanges in the moment, with Dr. Brisebois offering ways to change how we think about the exchange and how to open conversation before walking away. Dr. Brisebois shares what process she has learned to identify conflict, how she takes people through conflict resolution, and the necessity of psychological safety in the workplace in order to foster the communication required.  

About Dr. Mandy Brisebois:

Dr. Mandy Brisebois uses her influence in high level leadership positions to advocate for physician integration into our health systems. Ultimately a deeper understanding of our complex systems will enable physicians to maximize their impact and promote patient care in the most effective capacity. Ultimately this strategy contributes to less conflict in the work environment, and fewer practitioners modifying their practice due to burnout.

Dr. Brisebois is a certified Wellness and Executive Coach (with specialization in healthcare in process), a General Internal Medicine and Palliative Medicine Specialist, as well as having extensive training in conflict, negotiation, mediation, equity, diversity and inclusion. She has served as the Medical Director for a large 290 bed hospital, the Medical Director of the Covenant Palliative Care Institute, as well as an Associate Chief Medical Officer of Covenant Health. She is completing her Masters of International Health Leadership through McGill University and has trained at multiple world renowned organizations including the Mayo Clinic, Berkeley, Oxford, UBC, and the Justice Institute of British Columbia. Her leadership specialty is helping practitioners and teams find success through conflict, and learn from these successes to create happier, more efficient and more effective healthcare teams. She has spoken at many international events, and she is a published author in her fields of expertise.

Resources discussed in this episode:

• Canadian Medical Association statistics on physician wellness
• Crucial Conversations
• Edmonton Zone Medical Staff Association

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Physician Empowerment: website | facebook | linkedin

Dr. Mandy Brisebois, MSc, MD, FRCPC, AoDI, CEC: website | linkedin

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Transcript:

Dr. Kevin Mailo: [00:00:00] Hi, I'm Dr. Kevin Mailo and you're listening to the Physician Empowerment Podcast. At Physician Empowerment we're focused on transforming the lives of Canadian physicians through education in finance, practice transformation, wellness and leadership. After you've listened to today's episode, I encourage you to visit us at Phys Empowerment.ca, that's P H Y S empowerment.ca, to learn more about the many resources we have to help you make that change in your own life, practice and personal finances. Now on to today's episode.

Dr. Kevin Mailo: [00:00:35] As I've mentioned before, for those of you that have joined us on our webinars or podcasts, you know who I am. I'm Dr. Kevin Mailo, one of the co-hosts of the Physician Empowerment Podcast and one of the co-founders of Physician Empowerment, and who I have with me today is a colleague and a friend whom I really admire, not only for her clinical work, but for her incredible leadership. So joining me today is Dr. Mandy Brisebois, and Mandy is a general internist with a hospital based practice. She specializes primarily in palliative care and chronic disease management, but she's also held numerous leadership roles, including Associate Chief Medical Officer and Medical Director at a major community hospital. And Mandy, over the course of her career, has really taken leadership to another level. And one of her areas of focus as a medical leader is conflict resolution. And so that's what we're going to be talking about. And it's going to be interesting because we get a lot of training in medical school and residency on how to navigate a difficult patient encounter. But what we're going to focus down on today is interpersonal conflict between physicians. And I don't need to go to any great length about how common this is, but we certainly know what occurs. And with that being said, Mandy, why don't I let you take it from here as far as introductions and where you want to want to go with our talk today.

Dr. Mandy Brisebois: [00:01:58] Sounds great. Thank you so much, Kevin, for having me here. And it's just been such a pleasure to talk to you. I wanted to be on this show and also really specialize in this conflict work because I think we're in a really bad spot and physicians have been through a really tough time through the pandemic. We've been bogged down and a lot of us don't have much capacity to really be on our best behavior all the time. And I don't think in medical school we get taught how to manage conflict. In fact, I know we don't because in my role as medical director and the ACMO role, I had to manage so much conflict with colleagues and I had no idea what I was doing. And it wasn't my fault. And I thought for a long time that it was my fault. And so I went and got training and this is why I've got so interested in it, because I've got extensive training now in conflict negotiation and mediation. And I realized that there's a process and that we actually can learn how to take care of conflict.

Dr. Kevin Mailo: [00:02:58] Awesome. So what are some of the contributing factors then to conflict? Like talk about the ingredients for interpersonal conflict. I mean, one of the big ones coming out to me is like limited resources, right? For physicians as we try to deliver the standard of care to our patients. But tell me a little bit more about what do you think contributes to a conflict prone environment for health care providers?

Dr. Mandy Brisebois: [00:03:23] That's an excellent question, and I love that you bring up the resources because it's typically what we go to is what's limiting me. And the conflict, usually I say if we have conflict, we've kind of missed the boat. Conflict is the end result. The beginning is the communication, the collaboration, the expectations that are aligned, actually knowing what each other's goals are and having those conversations. And because we haven't really been taught how to do that, we end up just going, I don't have enough resource or I can't take care of my patient. And we shrug our shoulders and then we say to somebody, Give me more resources. And we don't actually know how to talk to them about what is the problem. And we don't know in the moment to say to someone, let's say a physician colleague talks to you in a very terse way, how do you manage that rather than walking away kind of thinking, Well, my day is really bad. I'm just going to, it's going to get worse now. Instead of talking to them in the moment and solving it and then it's over and you know your colleague better and your day is actually better when you learn how to solve those in the moments and you learn how to actually go through the problems and see what they are. It's not just about a resource thing. You have to actually nail it down to a solvable, neutral problem that you can solve. And it takes a lot of work and skill to figure out how to do that. And so I think we need to practice on it and learn how to do it.

Dr. Kevin Mailo: [00:04:47] So finding shared interests then is a key part of this.

Dr. Mandy Brisebois: [00:04:51] Yeah, and especially with big organizations, I keep saying that we are part of these massive organizations now. They have multiple strategic plans. Most of the time we're not really aware of what the strategic plans are, and so we want a resource. We don't know where it fits in our organization's strategic plan because we haven't, well, maybe we haven't looked at the Internet. The expectation that we're supposed to look on the Internet hasn't really been connected to us either. And even our leaders aren't really sure, like, what am I supposed to give to my colleagues? What do they care about? How do I connect the organizational goals with our goals as physicians? And when we don't connect, then we don't communicate. We don't know how to move forward and to really action on our knowledge, which is clinical care. And so I'm really trying to promote if we get these conflict situations under control and learn how to talk to each other about hard things that we actually learn about each other, we learn more about our jobs and we want to come to work instead of just sort of putting our heads down and walking in the door and going home.

Dr. Kevin Mailo: [00:05:55] Yeah, I think that's it. You know, as far as like when morale falls, I think a lot of people do just honestly just want to get in, get out and get through it. But that means people aren't invested in health care systems in which they work in, right. Because people sort of, I think, throw up their hands and feel disempowered. So how do you go about that process of learning to say those initial, start that conversation? I think that's probably one of the hardest steps is to say, I'm identifying a conflict here. How do we, how do we get to that point ourselves personally as individuals working within the health care system? And then what practically do we say when you talk about sharing in the moment or notifying a medical leader? How does that look? How should that look?

Dr. Mandy Brisebois: [00:06:42] It's so hard because we're not really used to it. We're not really used to responding to behavior that we're not comfortable with. And it is important to remember there's so many cultural differences between people that sometimes someone maybe seems very terse or no expression, and that just might be the way they are. So one of the things they say that if you notice something at work and somebody says something to you, let's say it seems quite aggressive because this happens a lot, someone's like, they were really aggressive and demeaning. And I'll ask them, Well, what did they say? And only 7% of what we understand are the words. So the rest of it is the tone of voice, the mannerisms. And often when they tell me the words, what they remember the words being, it didn't seem like it should be something that you would be so upset about because I wasn't there. And often when these people get feedback after the fact, they don't know what they did either. So what I tend to do is if someone, and you have to develop your own little things, but if someone says something to me in quite an aggressive tone, often I'll just do a little tear. I'm like, Oh no. Or I'll say, Ouch. Or I'll say to them, Are you okay?

Dr. Kevin Mailo: [00:07:50] Right.

Dr. Mandy Brisebois: [00:07:51] And they'll be like, What are you talking about? And I'll say, Well, this just wasn't the reaction I was expecting from you. I really thought we were on the same team. I'm worried I said something wrong. Can you tell me where you're at? And when you flip it around like that, people sort of go, Yeah, I'm having a terrible day. I've got 15 people in the Emerge, you know, what did you interpret? And I'm like, I just thought you were really upset with me. And most of the time they say, No, actually I'm not. I'm just really stressed. Thanks for saying something. Now, if they don't say that, I was talking to someone else and someone else said, What if they say screw you? And you start to think, Well, that would really feel bad. But you know what? I say the same thing because if someone says that I don't like it, that you're talking to me about this, I'll just say, But I really want to work with you. And when I got on this team, I was excited to hear what you had to contribute to the team. And for me, I can't be a part of that if I don't really understand what you're saying or I feel you're yelling at me and I want to be part here. And how do you think we can move forward? Or I'll say to them, what kind of tone of voice do you think you're using? And they'll sort of look at me and go, What are you talking about? And I had one person say, Well, I'm in the military, so I don't know. That's just how I talk. And I said, Oh, that's good to know. Like, you start to know each other.

Dr. Kevin Mailo: [00:09:11] Yeah, well.

Dr. Mandy Brisebois: [00:09:12] It's fun.

Dr. Kevin Mailo: [00:09:13] Yeah, well, that's that's what I sort of discovered as I get a little bit older and a little bit wiser. I saw personalizing things that I came across, whether that's a patient that might be irritable or an allied health colleague or a physician colleague, it's just peeling back that layer. Peeling back that layer just a little bit to find out what's going on. Because very often it's that old iceberg theory that comes up, which is we don't know 1/10 of what someone's really dealing with beneath the surface. Right? And I'll never forget watching one of the most egregious outbursts from a physician towards another staff physician when I was a medical student. And it was later in the week that he just sat down and described how his whole life was falling apart on a personal level. And that's when I realized, like hurt people hurt. And I don't think that's an excuse and to say, okay, well, we're just not going to deal with it. That's that's not right either. But it's about saying, okay, now there's another issue here, right? We're not talking about beds or discharges. We're actually talking about something else. So now we are going to deal with it. It's an opening.

Dr. Mandy Brisebois: [00:10:20] Yeah, exactly like you said, it's an opening and that person may go home and kill themselves. And I'm not trying to be depressing.

Dr. Kevin Mailo: [00:10:27] Oh, God, I completely agree. I have looked at the stats - for anyone that's listening to this podcast that I'd encourage you to look at the Canadian Medical Association statistics on physician wellness. There was a great publication that came out in 2017, 2018, and I think there is now post pandemic data that's coming out and it's staggering. And I think we all need to give one another some compassion and some space because the job is incredibly stressful, but so are many of our personal lives.

Dr. Mandy Brisebois: [00:10:54] Yeah, and don't give up on people. And I always say, just take a pause if something seems off, because after the fact, it is so hard to go over who did what and who said what. And especially if you go to a supervisor or something, we really try, it's called the Vanderbilt model, where you really start with this coffee chat and you just sit down with someone. I say, don't wait for coffee, do it right then, but talk to someone, look at them in the eyes and say, I actually care about you. I mean, you may not think I do and we're not, maybe we're not perfect friends.

Dr. Kevin Mailo: [00:11:28] Yeah, Maybe we're never going to get together --

Dr. Mandy Brisebois: [00:11:30] Yeah.

Dr. Kevin Mailo: [00:11:31] -- and go hang out outside of work. But I do care.

Dr. Mandy Brisebois: [00:11:34] Yeah. And I'm invested in health providers, whether it be a nurse, a physiotherapist or a physician. And I really do want to be here. And if you don't want to talk, just recognize. I recognize something. And if you ever have a chance to talk, I want to talk to you about it, but I'm just letting you know how I feel so you know that those things impact me at work too. And they sort of make me wonder whether I want to be here too. And when you say it that way, people start going, Oh, I'm impacting other people's work as well.

Dr. Kevin Mailo: [00:12:02] And I think physicians, we're all by and large, very conscientious. So that I think is a very powerful statement when you say you're impacting me because that that is kind of a a cue for us to evaluate our behavior.

Dr. Mandy Brisebois: [00:12:17] Yeah. And I try to make things, it's really important... I was just talking to somebody else and I said, it's so important to not tell people what to do or what they should do differently because we all want to be different, but no one wants to be told to be different, but really putting it on how it's making us feel and that it's their behavior, it's not them. That it just isn't that you think they're a bad person, it's just that moment that made you feel that way and then really focusing on the positives and you're talking about what to do about it. Well, you do that in the moment. And you know, if it doesn't work and something happens again and you do it again and it doesn't work and you have to get an adviser or a supervisor or whoever is above you involved, if you've said something in the moment, that person will not be surprised. Because you'll have twice said something and you'll say, How do we resolve this? And I'm like, Well, we're not resolving this. Well, I'm going to have to then get some help because I don't have the tools I need. And if you say it like that, like I don't have the tools I need to resolve this instead of someone getting called out of the blue with some complaint they didn't know it was coming because then they're coming into the conversation already unhappy.

Dr. Kevin Mailo: [00:13:26] Right. So, Mandy, you alluded earlier to a process. You said there are steps to go through conflict resolution. Can you give us an overview of that? I mean, obviously, we don't have the time to go into this in a whole bunch of depth, but I would absolutely love to hear this because, I mean, it's probably not that much different when it comes to care. There's a history, there's a physical, there's a lot of tests. I mean, we just we go through a process. So take us through an overview of that process of conflict resolution.

Dr. Mandy Brisebois: [00:13:55] I love this because I always say internal medicine is easy and everyone goes what are you talking about? Well, it's just you categorize things and stepwise, stepwise, stepwise. So this is exactly the thing. So I say, look, we have emotion. So we got, I call it the rant, but whatever it is, you've got to package that somehow, like deal with it. Some people have written me 15 page letters. They're like, This is great, let's send it off. Nope, this is just for you to think about. But you have to get that out and you have to be okay with it and recognize that emotions are normal and it's really hard. So give yourself that. That's the first thing. The second thing, though, is knowing where the place for that is and where the place is not for that. You take care of that and then you go through the process of conflict. I call it conciliation because conflict's never resolved. It's still there.

Dr. Kevin Mailo: [00:14:39] Yeah.

Dr. Mandy Brisebois: [00:14:40] So the first thing is what is the issue, as we say in conflict teaching. And the issue is the problem and the problem isn't He yelled at me. The problem has to be solvable and it has to be very clearly neutral. So it has to be something like if someone's yelling at you, I want to know how we communicate in the workplace to effectively get work done. And what's the process, so another problem would be what would the process be if you feel somebody is behaving in an unprofessional way in the workplace? Those both things are solvable. Both of them are very neutral. You're not using this, Crucial Conversations is a great program and it talks about victim, villain, and helplessness. And when you hear people talking about being a victim or you're a villain or I'm helpless, conversations will not occur, So it's very good to recognize that and keep everything neutral. So I spend an hour with people, actually, and outline the problems. It takes a lot of practice to learn how to do that. So you actually look through the problems, map them all out. People always come with to me with one, and there's actually 18 solvable problems. And when they look at them, they go, Wow, that's really an easy one. Like, I easily can come up with a solution to that. It's just like internal medicine. And so we do that. Then I send them home and I say, I want you to think about these problems and you tell me why you care. And this is really digging deep. It's very reflective. The why do you care if you communicate well with your partners? And it's all about I want to enjoy my work. You know, I want to be able to effectively work. I actually want to have a job. I need my job for for my livelihood. I don't want to take shifts. I'm not taking shifts now. So I'm losing money because I don't want to be there. So there's all these different things. Or it comes in it is infiltrating my family. So really, what do they care about? So then they come back. The next step is we talk about the stakeholders. So who's involved? You know, sometimes it's one person, but sometimes you have a whole team and there's multiple different people. And we go through that. And then I have the person think about what those stakeholders, they care about. And we're just guessing. But it's putting you in that position that you really think about them. And as you said before, what are they going through? They may collapse in tears when they turn the corner. You know, they may be getting separated, their child may be sick. They may be taking care of an elderly person. You don't know. So I always say, guess. Just go through it and think. And we create a, I call it a conflict roadmap, and we create this roadmap. And then I let the person decide, What do you want to do with that? And most people want to meet with the person that they had this thing with. And I usually offer to go sit with them while they're doing that, or I'll coach them through how to actually take that meeting in a really, again, really neutral, neutral language, positive way and just collaborating. And we send the person that we want to meet with, this roadmap beforehand. And it's amazing. The meetings are amazing.

Dr. Kevin Mailo: [00:17:33] Wow.

Dr. Mandy Brisebois: [00:17:34] Because physicians see that you worked so hard. I really want to be better. I really want to be your colleague and look at all the work I put into it. I want to hear your perspective. I guessed but now you tell me and then you can have a conversation about those things. I had one person come back and say, This was so amazing and someone who would never really share, they went back to their team, they shared everything and they're like, We got to get the team to do this. Because it bonds you. It bonds you together. That you both have some common goals. You see common things together. And it seems so easy when you've done it once. But it takes, it takes practice and courage and the ability and being in a safe place. And this, I keep encouraging organizations let people in your organization be in a safe place where if someone comes back at them and doesn't respond well multiple times, that you have a place to go and someone takes you seriously, that you're trying to do this. So this is the whole thing about psychological safety in our workplaces that we have to take it seriously so we can communicate in the moment.

Dr. Kevin Mailo: [00:18:38] So how do we create psychological safety? I hear that term so much, and I think it's amazing because I didn't hear that term 10, 15 years ago. Right. Or it wasn't that common. But how do we create robust organizations where we feel, number one, that we can share, number two, that we're heard, and number three, that it's safe as we do so. Right. We're not worried about retributive behavior or being silenced. Talk to, talk to us about that. I think that's so powerful.

Dr. Mandy Brisebois: [00:19:11] We need some brave people because it takes vulnerability and it takes bravery in the workplace. And I've sat in situations with my team talking about my son when he was suicidal or drug addiction with family members, really vulnerable, having chronic illness. And it's amazing when you start being vulnerable, people are vulnerable back and you start to develop these dialogs. And so if one person sees somebody model this behavior, so if someone talks to me in a really offensive way from my perspective and I say in front of all the residents and the nurses there, you know, oh, ouch. I'm, I'm really trying hard. You're modeling for all those people. And if it turns out well, which usually it does, honestly, it flips the behavior immediately when you say something like that. I've had patients laugh because they say, what is this emotion? Like I'm yelling, I'm angry. But it really gives people that ability to open up. So I think we need brave people that can model this, that can mentor it. And once you're actually on the ground doing it, it's not something you read on the Internet. Like we can write for our organizations all we want, that we have psychologically safe environments. You have to see it in action to feel safe enough to come forward, because many people have had experiences where they do try to come forward and they don't have that experience. And that's where we need to jump in. And that's some of the work I'm doing where people are stuck in those situations and I'm helping them work through it in that regimented way so we can take that road map to the stakeholders and say, we're really trying to help fix this problem and the organizations do care right now. We have to just come in a regimented way and really show them how we can do it better.

Dr. Kevin Mailo: [00:21:00] And what should medical leaders, like high level medical leaders, be looking to do, practically speaking, to begin to implement this? You know, we talk about modeling it in an encounter or a one on one or in meetings, but at an organizational level, what do we need to be doing?

Dr. Mandy Brisebois: [00:21:18] I think people are afraid in a lot of organizations to say anything. They don't want to jeopardize their relationships. They're working with people and just coming to work and going home is good enough. And I think that organizations and high level leaders need to find strategies for people to report things in safety, whether it be a click of the button that they can just click. And hey, if you have eight complaints about someone, it is, you know, in a lot of regions in bylaws that you can actually move forward without having to put your name forward. I think that people need to know that it's not just the concern that will go forward, but something will occur and they may not know what occurred, but they'll know that that behavior is stopping. And if they don't see it stopping, that they can go back. Because if we don't have those methods for people to move forward and really take it seriously, like really trust the people that we're--

Dr. Kevin Mailo: [00:22:18] We're talking credibility. We're talking credibility.

Dr. Mandy Brisebois: [00:22:20] Yeah. If someone says that this was very hurtful, it doesn't mean that the words were hurtful, but something about the interaction made it hard for them to work. And so instead of just sort of, sometimes they go to the person and say, well, what happened? And they're like, nothing. I didn't do anything. And they're like, okay, they didn't do anything. And that ends. Instead of that, they can say, What could it have been that this person felt so impacted? And you can actually work through it with the person who felt so impacted and say, What do you think it was? And really dig, it's called appreciative inquiry. You just keep asking these questions to find out what it was. And sometimes you get to an issue that actually didn't have anything to do this situation, or maybe it did, and the person who was talking to them had no idea about what they were getting into or what they were saying, or they didn't realize that something at home was impacting them, even. The person who is being a little aggressive or whatever it may be. So I think it takes conversations, it takes time. And so this means that organizations and physicians need to invest the time and say this is important, that we actually get to know each other, because we can have really great workplaces. And this is the message I'm trying to send that please don't give up hope, because if we do stick together, if you have trouble, we reach out to each other and try to work through this process and get some help. But it's solvable.

Dr. Kevin Mailo: [00:23:43] Wow. Wow. Mandy, this was absolutely amazing. And I hate to wrap it up.

Dr. Mandy Brisebois: [00:23:53] I know we have to go.

Dr. Kevin Mailo: [00:23:54] I know. I know. I don't want to. We are absolutely, absolutely going to talk again because I'll tell you why I think this is so relevant for Canadian physicians is to echo past CMA President, Dr. Smart, we are looking at crisis in our health care system. And crisis in our health care system means fewer and fewer resources for a sicker and sicker population that is aging. And this is going to bring more and more physicians in conflict with one another and in conflict with medical leadership and allied health. And we need the tools to navigate this. And obviously, this isn't the solution. The solution is more resources, which we have to advocate for separately. But the big one is that inevitably things are going to get worse before they get better. That is my own opinion. So how can we weather this storm and how can we come out as a profession, not only having gotten through it, but thriving and growing as a profession? Because I think there's a lot to be learned and I think things got, we learned a lot through the pandemic. And I think there's more to be learned and that the profession is an ongoing effort to modernize and improve.

Dr. Mandy Brisebois: [00:25:03] And we need to stick together, as you said.

Dr. Kevin Mailo: [00:25:05] Absolutely, care for one another, care for one another. You know, I try to treat my colleagues like patients, not, you know, not in a paternalistic way here, but in a notion of compassion. Right. Like just have some compassion for your colleague who might be exhausted, working long hours or dealing with a health issue or mental health issue or whatever. A little bit of compassion goes so far. So far.

Dr. Mandy Brisebois: [00:25:31] Absolutely.

Dr. Kevin Mailo: [00:25:32] So with that being said, we'll open it up to the chat if anybody has got any questions. But otherwise, I am so, so grateful to have had you on here, Mandy. It was just amazing and I cannot wait to interview you again on the podcast and have you do another webinar because I think people need this. I think we all need this.

Dr. Mandy Brisebois: [00:25:55] I need it. I coach, I can't coach myself, but I do, I get coaches to coach me through my own thing, so...

Dr. Kevin Mailo: [00:26:00] It's wonderful.

Dr. Mandy Brisebois: [00:26:01] Yeah, you've got to do it and I will put a plug if you're in the Edmonton zone, I am doing this work through the Medical Zone Staff Association, so go to their website if you need any help, like as a leader or someone in your organization and you want some advice or you want to learn how to do this, I'll help you through it.

Dr. Kevin Mailo: [00:26:18] Absolutely. Absolutely. Thank you again, Mandy.

Dr. Kevin Mailo: [00:26:22] Thank you so much for listening to the Physician Empowerment Podcast. If you're ready to take those next steps in transforming your practice, finances or personal well-being, then come and join us at Phys Empowerment.ca, P H Y S Empowerment.ca, to learn more about how we can help. If today's episode resonated with you, I'd really appreciate it if you would share our podcast with a colleague or friend and head over to Apple Podcasts to give us a five star rating and review. If you've got feedback, questions, or suggestions for future episode topics, we'd love to hear from you. If you want to join us and be interviewed and share some of your story, we'd absolutely love that as well. Please send me an email at [email protected]. Thank you again for listening. Bye.

Dr. Kevin Mailo welcomes Past President of the Canadian Medical Association (CMA), Dr. Katharine Smart, to the podcast. Dr. Smart shares how leadership roles can enhance the success of wellbeing within our careers. 

Dr. Smart details how the child health program she spearheaded in the Yukon came to be, and explains how wellbeing for patients and physicians alike is balanced in her program. She carries a lot of passion for the work and is a passionate person by nature. This passion helped Dr. Smart when she became the President of the CMA just as the pandemic was getting extremely difficult. Her authenticity is what she carried into that role, and as she advocated for colleagues she worked to state clear facts and distill where things were truly at.

In this episode, Dr. Kevin Mailo and guest Dr. Katharine Smart really dive into what wellness looks like for physicians in the dark time healthcare is currently experiencing. Dr. Smart believes that having a voice and connection to work through leadership opportunities is a vital part of avoiding burnout. She explains the variety of ways leadership can take shape. She also addresses releasing the fear of failure to realize that what we call ‘failure’ is really a necessary part of growth. Drs. Kevin Mailo and Katharine Smart have an enlightening conversation about burnout, mentorship, and the power of letting go of perfectionism in this must-hear episode.

About Dr. Katharine Smart:

Dr. Katharine Smart is a pediatrician in Whitehorse, Yukon and Past President of the CMA. Her work is centred on developing collaborative partnerships with community and government services to serve marginalized children using a model of social pediatrics. She works primarily with children who have experienced trauma and adverse childhood events, and she witnesses the broad and lasting impact these events have on children and their development daily. She is passionate about improving services for marginalized children in an effort to change their life trajectory.

In addition to her community-based work, Dr. Smart enjoys acute care and provides on-call services to the hospital. Before moving to the Yukon, she was a pediatric emergency medicine physician at the Alberta Children’s Hospital in Calgary. Dr. Smart is the past president of the Yukon Medical Association.

Resources discussed in this episode:

• Canadian Medical Assocation (CMA)

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Physician Empowerment: website | facebook | linkedin

Dr. Katharine Smart, Pediatrician and Past President of CMA: website | instagram | twitter

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Transcript:

Kevin Mailo: [00:00:00] Hi, I'm Dr. Kevin Mailo, and you're listening to the Physician Empowerment Podcast. At Physician Empowerment we're focused on transforming the lives of Canadian physicians through education in finance, practice transformation, wellness and leadership. After you've listened to today's episode, I encourage you to visit us at PhysEmpowerment.ca. That's P H Y S empowerment dot ca to learn more about the many resources we have to help you make that change in your own life, practice and personal finances. Now onto today's episode.

Kevin Mailo: [00:00:35] Hi there. I'm Dr. Kevin Mailo, one of the hosts of the Physician Empowerment Podcast. And today I am extremely, extremely excited to introduce everyone to Dr. Katharine Smart. And Dr. Smart is the past president of the Canadian Medical Association, and her term is recently expired as president of the Canadian Medical Association. She is kind of a super doctor. She is a pediatrician based in the Yukon with a practice centered on the emergency department, as well as community based clinic. And I'm honored and excited to be joined today by Katharine. Katharine, why don't you tell us a little bit about yourself and your work.

Dr. Katharine Smart: [00:01:17] Sure. Thanks, Kevin. Excited to be here as well. And thank you for all your work. So, yeah, I've been in pediatrics now for over 20 years. I started my career as a pediatric emergency medicine physician at the Alberta Children's Hospital in Calgary, but I've always done work in northern Canada, time in northern Manitoba, I had the opportunity to work in Nunavut as a pediatric resident, so I've always had a passion for rural and remote medicine as well. And an interest in First Nations health and Indigenous health. So I had the opportunity to move to the Yukon five years ago to create a child health program there. At that point in time, they had an amazing group of six pediatricians who were coming up twice a year for four days a month and providing services to kids in the territory. But as you can imagine, four days a month of pediatric coverage, no call coverage, nothing to support acute care was probably not really enough. And and in talking with those colleagues, they definitely saw the role for for more supports for children. So I moved there with my husband, who's an orthopedic surgeon, and the two of us built two new programs, me in pediatrics in him and orthopedic surgery. And that's what I've been doing clinically for the last five years. So now we've got four pediatricians, child psychiatrist, a social worker, a neonatal and pediatric medevac program, outreach to all our Indigenous communities, lots of partnerships with schools, mental health and our First Nations communities. And I'm really proud of our program and the work that we do to serve kids and families in the Territory.

Kevin Mailo: [00:02:40] That sounds absolutely outstanding. Now, I'll always just kind of pitch, but are you guys recruiting?

Dr. Katharine Smart: [00:02:46] Not currently. We're actually fully, fully staffed at the moment. Yeah, I think it's a testament to our program.

Kevin Mailo: [00:02:53] I would absolutely agree.

Dr. Katharine Smart: [00:02:54] Yeah.

Kevin Mailo: [00:02:55] I would absolutely agree.

Dr. Katharine Smart: [00:02:57] So, you know, Kevin, I know one of your passions is wellness. And when we designed the program and just the way we operate our clinic, that was one of the foundational principles for me. And I think one of the advantages of creating a program we've already been working for a long time is you kind of see the pitfalls. So I thought a lot about that and the way we structured the way we work. And we work as a team, the four of us, we support each other. The person who's on covers all the patients, they cover the inbox, the EMR, any emergency.

Kevin Mailo: [00:03:24] So when you're off, you're actually off.

Dr. Katharine Smart: [00:03:26] You're off. Yeah. And we still schedule in such a way that there's a lot of continuity. You know, most patients are follow ups. It'll be the same pediatrician, but they're always covered. So if something comes up, something's unexpected. There's no holes in care. But exactly for us workers, when we're off, we're off. And we have that total confidence in our colleagues, they're covering. So that structure, I think, has made it quite desirable. Another...

Kevin Mailo: [00:03:49] Isn't that amazing. It's rare. It's rarer than it should be.

Dr. Katharine Smart: [00:03:53] The other key piece I think to our success is, you know, I knew that we'd be dealing with a variety of challenges and a lot of our patients have a lot of social challenges. So I was able to negotiate with the government an alternative payment model. So we get paid a combination of a daily rate plus fee for service for after hours coverage. So I think we're well remunerated. It covers our time. It allows us to work in different ways, right, being very patient centered.

Kevin Mailo: [00:04:20] Creative. If it needs a phone call...

Dr. Katharine Smart: [00:04:22] It needs a phone call, a video call, an email, doesn't matter, right? Because we're just being paid to look after patients. And we do it in the right way that works for patients.

Kevin Mailo: [00:04:30] What a great example of how when the economics of health care align with well being and best patient outcomes. Isn't that wonderful? I love it. It's so important.

Dr. Katharine Smart: [00:04:39] Yeah, it's so important and it's made it possible for us to recruit and retain, but it's also made us desirable for locums because they know they're coming into a well run clinic.

Kevin Mailo: [00:04:47] Oh yeah.

Dr. Katharine Smart: [00:04:48] With a clear plan, clear ways things are covered. They're going to be well paid for their time. So it, and like you said, the win of that is now it's sustainable. We have great people. We're all aligned. We know what we're doing. We know our purpose and those things have come together. And that really links to me to one of my principles, which is I think solutions have to work for patients and physicians. And when they do, that's when you get the best wins. And I think our program is an example of that.

Kevin Mailo: [00:05:11] I absolutely love it. Let's talk briefly about your work as president of the Canadian Medical Association, because what really caught my attention was listening to you speak so boldly and courageously about the crisis facing our health care system. And I think we're all feeling that. I know we certainly get word through Physician Empowerment about physicians coast to coast struggling to deliver care under a health care system that's, frankly, under-resourced. So first off, I want to sincerely thank you for that advocacy because, you know, it's there, but we need to start talking about it. And you have done such a powerful job. And I would encourage anybody to look up Katharine's media interviews at CBC and some of the others that have been just remarkable in terms of crystallizing some of the issues that we're faced with. Do you want to just talk a little bit about that briefly, because the crisis isn't about to go away. We always try to create evergreen content, know things that are going to be relevant ten years from now. I worry this podcast is going to be just as relevant in ten years. If I can be blunt. So tell us about what's going on in Canadian health care.

Dr. Katharine Smart: [00:06:14] Yeah, for sure. I worry about that too, Kevin, and thank you for your kind words. Yeah, it was a really interesting journey into this role and it's quite a long landing kind of launchpad into becoming the CMA president. You know, there's the election, it's few years before then, you're the election year present, etc. So, you know, when I put my name in for this, it was pre-pandemic, when I found out I won the election, it was just like the month before the pandemic was declared. And then I came into the role of president-elect sort of a few months into the pandemic and then became the actual president kind of a year into the pandemic when things were really starting to get difficult, I think we were starting to see a lot of less social cohesiveness around how we were approaching the pandemic. There was, you know, vaccines were out, vaccine passports that was controversial, mandatory vaccines for health care workers. We were starting to see that narrative shift from health care as heroes to a lot more harassment and intimidation of health care workers, protesters outside a hospital. So things were really heating up. And of course, at that point, we were deep into the ICU crises with hospitals being overwhelmed, people not being able to receive care. And it was a really tense time. So I would say that the role I ended up being in was certainly not what I thought I was going to be doing when I when I took this on. But I felt an immense sense of privilege to be able to speak for my colleagues, because what I would say is, you know, whenever as a physician, I felt so proud of my colleagues because of the tremendous work they've done over these past two years. I mean, always people are doing tremendous work, but people have really had to rise to this challenge in a way that we haven't seen. And to be the person out there representing this profession to the public and publicly, I took that very seriously. And it's really meaningful for me to hear feedback from colleagues who felt that I did it justice. And that was my goal. And my personality is, I'm a straight shooter. If you ask my opinion, you're going to get it. I'm not always right, but I'm going to tell you what I think. And I tried to carry that authenticity into my role as CMA president because I felt my job was to state the facts and to state what I was hearing from colleagues and to put it out there, really distill for people this is where we are. And I, your question, what's the state of Canadian health care? I mean, I don't think it is an overexaggeration to say we are at, I think the low point that we've probably ever been at in our system. And it's not in one place, right? We are now seeing this across the system. It doesn't matter what you're talking about, from community clinics to emergency departments to inpatient wards to long term care to home care, it doesn't matter. There's no part of the system that's working well. There's no group of physicians who would say to you right now, I can deliver the care I want for my patients, Everyone is struggling. And the problem is fundamentally about access and being able to deliver care to patients in a timely way. And in none of those settings is that happening. And I think that's leading to the burnout and moral injury that we're seeing amongst not only physicians but across health professions. And that's now leading, I think, to the staffing challenges we're seeing as people are starting to walk away because they just can't compromise themselves any further, you know, both professionally, ethically, physically, mentally. The toll has been massive. And I always say the health care system, to me, it's the people. A hospital bed means nothing without the expert care of the staff. And it's not only doctors, as you and I know, it's the nurses and other parts, pharmacists and cleaners and everyone who comes in and supports that patient. And the fact that we have a system now that is eating those people alive and spitting them out is deeply worrisome because that is the most precious resource. And right now we have not invested adequately in the people to make them feel valued, and we're paying that price. And these are not resources that are easily recaptured.

Kevin Mailo: [00:09:58] Like when I think about my incredible nursing colleagues, for instance, that have decades of experience and I rely on them in the emergency department for their intuition and their experience and their knowledge. I mean, when somebody like that walks, there isn't going to be suddenly a replacement. There's no money for that. Do you know what I mean? And we're faced with this across the health care system. And, you know, the term that's getting thrown around in the Western world, kind of in terms of people being dissatisfied with their jobs are struggling, is that quiet quitting, right? You know, it's that person that decides to retire. It's that family physician who decides to retire this year instead of three years from now because she's burnt out. Do you know what I mean?

Dr. Katharine Smart: [00:10:42] Oh, absolutely. Absolutely.

Kevin Mailo: [00:10:43] It's, you know, a nurse that doesn't want to pick up that overtime shift because she or he is burnt out. Right? These are the things that are happening quietly and leaving fewer and fewer of us to work in a system that's putting more and more pressure on frontline staff.

Dr. Katharine Smart: [00:11:02] 100%. And that's the vicious cycle, right? Because now the people showing up are showing up to a system that's struggling more and more and more. So it just keeps building. And I agree. I think the other thing that people don't understand enough I mean, you and I understand it as providers, but the public doesn't understand is just what you said. You know that nurse who's been there 15, 20, 30 years in an ICU or an emergency department, that the skill of that person.

Kevin Mailo: [00:11:26] Goodness.

Dr. Katharine Smart: [00:11:26] The knowledge, you cannot replicate that. And then the mentorship that they provide.

Kevin Mailo: [00:11:31] Oh, my goodness.

Dr. Katharine Smart: [00:11:31] Not only to junior nurses, but junior doctors. Right. How many times did you have your butt saved as a junior doctor by - and even as a senior experienced doctor - by experienced nurses--

Kevin Mailo: [00:11:41] -- how about as a staff --

Dr. Katharine Smart: [00:11:42] -- like all the time, even today, right. Like Kevin hey, I think you missed this or that dose was wrong or actually this. Like, the reality is we all need each other. And when we lose those people, experienced anyone in any of the health professions, with them walks wealth of experience, insight, compassion, ability to mentor others. And that's what creates resiliency and safety in our system. And it's intangible, right, because we don't have a way to really track it.

Kevin Mailo: [00:12:07] It's our culture, it's our folklore, it's our essence. It's in the health care system.

Dr. Katharine Smart: [00:12:13] And it's irreplaceable. And those are the people we're losing.

Kevin Mailo: [00:12:16] It is, right? And also, you know, another thing that we've noticed is physicians that are exiting the public health care system and working more privately because they're burnt out and they're struggling with working conditions in the public health care system. So these are huge challenges that we're faced with. Huge challenges.

Dr. Katharine Smart: [00:12:35] Absolutely. And I think the real, at the heart of this is that providers are tired of having these systems failures downloaded onto them as individuals, both to be held to feel responsible for trying to prop up a broken system, to feel responsible for the bad outcomes that are coming from this broken system and at times being held liable and medically responsible for outcomes, which are nothing to do with them and not their fault.

Kevin Mailo: [00:12:59] Yeah, these are system-based issues, you know.

Dr. Katharine Smart: [00:13:02] 100%. So there's huge risk right now for people as well. I think both emotionally but also legally, all of these things. So it's, I think it's a really challenging, challenging time.

Kevin Mailo: [00:13:14] So you mentioned, you and I have talked about burnout and clearly we're both very passionate about it. Today's topic is fascinating, that you brought forward is leadership as an antidote to burnout. I'm fascinated. I want to hear it, about this. What does this mean? How is leadership an antidote to burnout?

Dr. Katharine Smart: [00:13:33] Well, what I've been thinking a lot about, right, is just what you and I have been saying. Like here we are, things are dire, but what we know is the people in the system are amazing. They're resilient, they're highly competent, they bring really an incredible skill set. Anybody in health care to me is the type of person I want to be friends with and have over for a beer, right? They're just my people. So what I've thought a lot about is so many of these things are out of our control, right? The systems pieces. In some ways we can't make it totally different tomorrow. SSo what can we do and where can we be putting our efforts or framing up our roles and our moments in the system to feel like we can regain some control and choose things and pass forward that make us feel like we're still contributing to making things better when it can feel so hopeless. And for me, and that's part of been, part of my experience in my journey as a leader, as president of the CMA and now as past president, has been through leadership. And I think what I would like younger doctors to consider is, is developing your leadership skills a way that you can feel you can start to position yourself to harness some control over what happens next. So maybe that's in a small way, in the way you design your clinic, the way you run your department, the way you show up in your staff meetings, in your hospital, in your community. Maybe it's more broadly as a representative in your PTMA, maybe it's getting involved with the CMA. There's all different things people can be doing, but I really believe that having those leadership skills, starting to see yourself as a leader, so that you start to feel you're someone who could be part of that change, however small. I think those are those steps to regaining sort of our power and feeling like we can be part of the solution. And I think to me it can be that antidote to hopelessness or burnout is that sense of, okay, it's not perfect, but I'm part of the conversation and I feel like I've got the skills to show up that way. And I think developing those leadership skills is really important so that you feel you can be at the table.

Kevin Mailo: [00:15:27] I think that's incredibly powerful because it is a source of burnout when people feel disconnected from their workplace. And that's not just specific to health care, that's across multiple industries, right? People don't feel like they have input, feel like they have a voice. And so giving yourself a voice by becoming a leader can be very, very powerful. What are some practical ways that people can do that? Right, like you mentioned, getting involved, but people say, Well, I've never been in a leadership position before, and I'm a big believer in at some point everyone has to jump, right? You know, at some point we have to deal with the uncertainties that life throws at us. We do it in medicine all the time, but we don't think about it in other aspects of our life, whether it's finance or leadership or practice management. But, you know, talk to us about, like, practical, small steps that we can take to get involved without feeling we're in over our heads and without that fear of failure, which I think is another thing we struggle with in the profession.

Dr. Katharine Smart: [00:16:22] Yeah, absolutely. I think those are all great questions. And I think the first thing is, you know, be flexible with yourself about what being a leader means, right? It doesn't always have to mean being the top person or having a really prominent role or even a role with a title. Being a leader might just be how you show up with your colleagues that day. You may just decide I'm going to show up and I'm going to make a point of really checking in with people authentically and leading that way within my cohort of friends and colleagues. That may be how you show leadership. I think find a mentor, right? Look around you, look at people who you admire or just show up in a way at work or in a leadership role in a way that you think, Yeah, I respect that, I'd like to be like that, and talk to them about their journey, what they've learned. I think people have a lot of wisdom to share that have been doing this longer that can tell you These were some of the pitfalls, these are things I wish I would have known, these are things that helped me. So don't be afraid to create that network. I think we're getting better at that as physicians, we're finding each other in these different informal and sometimes formal groups, like minded people, and we're trying to build each other up. Right? And I think that's really, really important. So lean into those opportunities, look for them. I think there's also some more formal opportunities. You know, the physician leadership courses that are available can be really helpful. And I've taken some of those myself over time that I found really valuable in terms of crystallizing my skills. I think we all come with a variety of skill sets, some things to help us, sometimes things hinder us. But the more you have insight into yourself and your own personality, what your strengths and weaknesses are, and can start to kind of put a framework around some of the challenges that we encounter as physicians and as leaders. I think that can build your skills and you show up feeling more confident and it gives you, just like you show up to a code with a plan, being able to show up to difficult communication situations, difficult, you know, organizational situations. If you come there with a framework of how you're going to deal with it, I think you feel less afraid, less intimidated, less afraid of failure because you actually kind of have a plan about what you're going to do. So I think building all those things can really put you in a position where you feel more empowered to take those leaps of faith and take things on. And then I think it starts to build from there, right? Once you see how you do, then you can start to build the confidence to take on more and more roles, and eventually you'll probably find yourself mentoring other people. And there's a lot of learning in those opportunities too.

Kevin Mailo: [00:18:43] Absolutely love it. Talk to us about the importance of passion when it comes to leadership roles, and I'll mention that I could really sense passion behind your vision of setting up the pediatrics program in the Yukon and serving those communities and serving your patients. So passion fuels leadership. But talk to us a little bit about what that means in our lives. Right? It's not just about sitting on a hospital committee so we can say we sat on a hospital committee.

Dr. Katharine Smart: [00:19:10] Yeah. So important. And it's funny you ask me about that because I've self-diagnosed myself with excessive passion syndrome. I call it hashtag EPS. So other people are welcome to join me in that diagnosis.

Kevin Mailo: [00:19:22] I love it. Yeah, I love it. That's why I spend all my time in Physician Empowerment.

Dr. Katharine Smart: [00:19:27] Yeah, No, totally. So, you know, in terms of passion, I think for me that's been something that I've really recognized I need to lean into in my career because it's really, I think, what makes me me, right? So again, I think part of figuring out how you want to show up as a leader, as a physician, is understanding yourself and what really drives you. So what I know about myself, that's why I've created my own DSM criteria for myself, is that I am a very passionate person. Now sometimes that gets me into trouble. Passion is not, doesn't always play out well, right? Because sometimes you're so passionate about what's going on that it can be overwhelming for people.

Kevin Mailo: [00:20:00] That was my question? Yeah, how do you navigate that when other people are like kind of lukewarm?

Dr. Katharine Smart: [00:20:05] Yeah, it could be a lot, right? And I know that I can be sometimes a lot and sometimes it can make you very emotional and sometimes, you know, tempering that so that it's not overwhelming or that it's appropriate, right? Because we don't always get what we want by being super emotional. Not that that's always good or bad. But again, it's just realizing, right? It's good and it's bad. It's got pros and cons. But for me, when I'm doing things I'm passionate about, that's when I hit my flow, right? That's when I know I'm doing the right things because that's where I feel excited, I feel that meaning, I can see myself being successful. I can see myself achieving things because I think often that passion is contagious. It gets people on board with you. You feel people find you authentic because they can tell you're really committed to it. And I think things I've been able to do where I've had success have been because I've fueled that with the passion that I feel. And for me, passion directly relates to purpose, right? Because I think that's the other value that really matters is you have to know your why and what your purpose is. And again, the beautiful thing about health care is there can be a whole variety of purposes for people. For me, I like building things. I really enjoy finding problems, trying to solve them, looking for solutions, and feeling like I'm creating something. So for me, that's kind of my why and it gets fueled by my passion. So that's why the Yukon opportunity was sort of perfect for me. I think I was at a point in my career where I had enough wisdom, having seen the health system for a long time, I knew kind of things I thought would work and not work. It was an environment that I felt passionate about. It was a patient population I felt passionate about, and I could see the ways to bring the various components of the system together in a way that could really serve patients. And I could feel like we were making an impact, but also doing it in a way that allowed me to feel like I could create a job that I felt I had some reasonable life balance in. I was, it was meaningful. I was able to create a group of colleagues that shared my vision and passion, and we have shared our values and view of how we wanted to deliver care, and then create that. And so that, for me, really kind of ticked all those boxes. But I think when you bring passion to your purpose, that's kind of the magical thing. And that's where I think things really start happening. And I think those are, again, why, in my view, leaning into leadership for people who are interested in that can really create those opportunities. Because once people start seeing you as a leader, you're able to make more things happen because people come to you and you have more opportunity to share your ideas and solutions and then you start to be part of seeing things change. And I think once we start to feel things changing and getting better, even if it's small, that fuels a lot of hope. And I think that's what people need right now in the system, is hope that it could actually be different.

Kevin Mailo: [00:22:38] Talk to us about failure and setbacks, and I'll frame it a little bit in terms of the broader medical culture. And one of the things we struggle with in medicine is failure, right? I mean, we're highly selected against it and we're not used to having setbacks. We're not used to failing. And we often try to fail privately. But leadership roles mean public failures. Right? And it can be as much as you get shot down at a committee meeting, it can be a giant flop with your clinic, it could be a major dysfunction at a hospital level, right? I mean, there are scales of failure, but failing. How do you approach failure or what wisdom do you have in this space, Katharine?

Dr. Katharine Smart: [00:23:20] I think that's so critically important. And I think our fear of acknowledging failure as an unavoidable part of career development, personal development, growth across the spectrum is actually a real problem, right? Because we all are going to fail. No one's perfect. The perfectionism in medicine, I think, is part of the weird hidden curriculum that drives all sorts of strange behaviors and interactions and ultimately, I think often doesn't create the best patient care because we're doing things that are performative just because we want other people to think we're good, not necessarily because it's the right thing to do. So I think that that fear of failure is really behind a lot of problems. You know, and I've absolutely had failures. I've had failures with relationships with colleagues, I've had clinical failures where I've made the wrong decision or the wrong diagnosis. I've had personal failures, where I've let down people that I care about in my life, or haven't shown up maybe the way I wanted to. I think like everyone I've had all those things happen. But how I try to approach it, and I think partly why I am where I am today is because of some major challenges I had at one point in my career professionally, with colleagues, where I was just in a clinical situation that I really didn't feel comfortable in and I had to make some major decisions about what I was going to do with my career at that point. But I really leaned into that as an opportunity for self improvement, right? I really reflected on that moment in time in my career and thought, you know, why did this turn out the way it turned out? What do you feel proud of in terms of how you handled it? What do you wish you'd done differently? How could you have made this more positive? What could you have done that would have been better and gotten a better outcome? And I took that as an opportunity to really develop some additional skills. I thought, okay, I don't think I communicated as well as I could have. So I took a course on communication. Right? I thought, you know, I don't want things to be like that again. So I took a course about getting to understand yourself better and how you show up as a leader. So I really tried to take that as not an opportunity for the blame and shame for anyone involved --

Kevin Mailo: [00:25:23] -- or to retreat --

Dr. Katharine Smart: [00:25:24] -- including myself --

Kevin Mailo: [00:25:25] -- or to retreat --

Dr. Katharine Smart: [00:25:25] -- or to retreat. But I really leaned into it, right? I was like, You've got to lean into this failure. Like, what could this mean for you and what can you take from this? And how do you leverage this moment to improve yourself? Because I think everything in life has a lesson in it, and you can either choose to be made smaller by it, you can choose to let it defeat you, or you can choose to not own your part in it, right? Because no matter what happens, you always have a role. And I thought, I've got, I'm either going to let this sort of destroy me or I'm going to lean into it and I'm going to come out better. And I think I did come out better. And I suspect I probably never would have became the president of the Medical Association had that not happened to me. So I think that we shouldn't be afraid of our failures. I think we shouldn't be afraid of knowing that we're never always going to be perfect. And that's okay. But we've got to stay open to what's the lesson here for us and how can I emerge from this a better version of who I was? And be okay with the fact that it took a failure to get there.

Kevin Mailo: [00:26:22] Wow, absolutely love that. And even just celebrating the journey and the process. And that's another thing in medicine, we're very goal oriented, like, okay, I just want to set this up or establish this or have this new process of doing things. But the reality is, is that we may not get there. Right? But in the process we've learned something about the system we work in or we've learned something about ourselves that allows us to become more powerful as leaders and more effective in communicating that vision and that passion.

Dr. Katharine Smart: [00:26:53] I totally agree.

Kevin Mailo: [00:26:54] It isn't just a saying that failure is an ingredient of success. Failure truly is key to success. You haven't tried if you haven't failed.

Dr. Katharine Smart: [00:27:03] I agree, and I don't think you're going to find any successful person in any walk of life who hasn't failed multiple times across spectrums of their life. That's just the journey, right? It's not a straight line from A to B, it's up and down. And again, I think the most interesting people are often the people that have been through some really hard things. And that's where we find ourselves, often, and find who we really are. And I think we have to be open to that. And again, I think this is why community is so important, right? Being able to talk honestly about this with each other, normalize, normalize failure, right? Be like, hey, man, this is part of it. Like, you know, one of the most powerful things that happened to me - I'll never forget this - I was a new attending, so I was a peds emerg doc in Calgary. I'd done my fellowship there. So on June 30th I was a resident, a fellow, and then July 1st I was attending physician. We've all had that transition. But, you know, in my case, like a pretty straightforward transition, right? The department I trained in, worked in, I'd had a lot of independence as a fellow, so it wasn't really all that different. But all of a sudden my anxiety around what I was doing was like ten times what it had been the day before. And I was just like perseverating about all the patients I was seeing, potentially making mistakes, and it was getting overwhelming, like it was like anxiety that was like I couldn't sleep, like it was a problem. And I talked to a colleague, a good friend of mine who's still a close friend, a more experienced emerg physician, and she said something to me that was really helpful. She said, Katharine, if you imagine the best doctor you know, like someone you really respect clinically, you think they're excellent. I was like, okay. She's like, Do you think they're right 100% of the time? And I was like, No, that's impossible. She's like, Right, so say you're amazing and you're right 98% of the time, which no one's even that good, you know that, right? That still means every month you're seeing thousands of patients, there's going to be several like 20, 30 or more patients where you were wrong. Now, most of the time we're lucky that the natural history of things is nothing untoward happens or people come back and there's this second go and it's fine. But other times, sometimes, bad things are going to happen and you're going to wish you'd done something different. She's like, What you have to understand is it doesn't matter if you're the very best of the very best, that is part of this work. It's always going to happen. It happens to all of us. And you have to let go of this pursuit of being perfect because it's impossible. And that was so powerful for me. It really allowed me to step back and go, You're right, I'm going to have, and even mistakes I don't know if that's even the right word, right?

Kevin Mailo: [00:29:23] I mean, it's a process of self forgiveness and learning to forgive ourselves before the event happens.

Dr. Katharine Smart: [00:29:30] That's right. And that really helped me. And then what I realized and what I tried to really march forward with from that in my career was, Okay, instead of seeing this as as bad and blaming, let's see this as learning, right? So when I had a case that bounced back or something went differently, really, honestly, look at what happened and ask yourself, could I have done something differently? And sometimes the answer is no, right? Sometimes you look at the care you gave and you're like, Given what I knew in that moment, I wouldn't have done anything differently. Other times you're like, You know what? The patient told me X and Y and I didn't really listen or I didn't pay enough attention --

Kevin Mailo: [00:30:03] -- I was distracted --

Dr. Katharine Smart: [00:30:04] -- and I should have done something else. Right? But I committed in that moment to really look at these, if you want to call them failures or misses or even going to term them, as opportunities to become better. And so that really shifted the way I felt about it from blaming and shaming myself to being like, No, I'm a continuous learner. I'm going to lean in to these moments. I'm going to make sure it makes me a better doctor, and I'm going to talk to my learners about this, right? I'm going to be overt with them about how I think, how I approach the things I do. And hopefully give them a framework too that allows them to be kinder to themselves. Because some of this is about kindness to yourself.

Kevin Mailo: [00:30:40] Absolutely. And just creating a culture of humanity within our health care system. We are not a bunch of metrics. Right? And it is not just about tracking a bunch of bounce back rates or whatever, a bunch of statistics. It's about creating a human health care system that ultimately is there to support the frontline workers and it benefits patients, right, when you're not paralyzed with fear going in to work.

Dr. Katharine Smart: [00:31:08] 100%. And I think the problem is operating from a place of fear iin medicine actually can cause a lot of harm. Because doing unnecessary things to people because you're anxious or fearful is actually harmful. Right? So we need to acknowledge that as well.

Kevin Mailo: [00:31:22] Yeah, without question. Without question. So I think we should probably begin to wrap it up. But we'd love to have you back on again because there was just so much here. Katharine, do you want to share any kind of closing thoughts or reflections or just something for physicians to take away with them today?

Dr. Katharine Smart: [00:31:40] Well, I think if I could say anything to physicians right now, it would be a resounding thank you. I mean, people have just shown up incredibly in this time. They've shown up in the system. They've shown up for their colleagues. They've shown up as leaders in the media and social media for their communities, for the country. I mean, I think it's really been incredible just to see how people have stepped up in this unprecedented time of a global pandemic and just tried to look for any way they could make a contribution. And people have done it in so many different ways and all of it's been needed and necessary. And I've felt so proud to be a physician. I've felt so proud and privileged to represent all of you as my colleagues. And I just really want to say thank you to people for the work that all of you are doing and continue to do, and that I hope that we can continue to support each other, even though it feels like dark times. I know the only thing that's going to get us out of this is the people in the system. So make sure you're looking after yourself. Don't sacrifice yourself on the altar of medicine. That is not the solution here. But continue to show up the way that works for you. Lean into your passion and purpose and most importantly, lean into your colleagues, who I know will be there to to support you when you need it.

Kevin Mailo: [00:32:49] Wow. Absolutely amazing. Again, I really want to thank you for being here today and speaking to us, Katharine. And again, I think on behalf of many, many physicians across the country and patients as well, thank you for your advocacy in getting us through the pandemic. But afterwards as well, and everything you do to improve this, the public health care system that we all love and cherish. And so, again, thank you so much,Katharine.

Dr. Katharine Smart: [00:33:17] Thanks for having me.

Kevin Mailo: [00:33:19] Thank you so much for listening to the Physician Empowerment Podcast. If you're ready to take those next steps in transforming your practice, finances or personal well-being, then come and join us at Phys Empowerment.ca P H Y S empowerment dot ca to learn more about how we can help. If today's episode resonated with you, I'd really appreciate it if you would share our podcast with a colleague or friend and head over to Apple Podcasts to give us a five star rating and review. If you've got feedback, questions, or suggestions for future episode topics, we'd love to hear from you. If you want to join us and be interviewed and share some of your story, we'd absolutely love that as well. Please send me an email at [email protected]. Thank you again for listening. Bye.