Alisa Le, financial advisor at Pacific Advisors specializes in advising dentists and physicians. Is keeping your financial papers and legal affairs organized and easy to access an issue for you? Alisa talks about her system for that and her philanthropic ventures and also talked to us about:
- How the Living Balance Sheet can help you organize and strategize with all your legal, tax, mortgage, and banking advisors to get the most from their services
- The difference between net worth and high income
- How the Life Visions process can help you create a wealth strategy to accomplish your highest vision
Josh Mettle: Hello and welcome to the Physician Financial Success Podcast. My name is Josh Mettle, and this is the podcast dedicated to advising physicians how to avoid financial landmines. Today, I’m excited to speak with Alisa Le, financial advisor at Pacific Advisors in San Diego, California. Alisa specializes in advising dentists and physicians through a unique planning tool called the Living Balance Sheet which we’ll be sure to find out more about on today’s show. Alisa, good morning and how are you?
Alisa Le: I’m great, Josh. How are you?
Josh Mettle: I’m doing wonderful. Thank you so much. There’s a lot of interesting stuff that I learned about you on your website, but maybe let’s just start by if you could give us a little background and history with yourself and Pacific Advisors and maybe how you got started with them.
Alisa Le: Of course, I’d love to. I am a certified financial planner and have been in practice since 2006, a very interesting start time, and as you mentioned, I started out with medical and dental professionals, and today they’re the majority of my clients, and I knew starting in this career right out of college, I needed to find some professional clients that I could grow with that would value my services. At Pacific Advisors, the doctors we work with always us that they wish they had more financial education during their residencies and fellowship programs, and they tell us that at all various stages of their career, we go through a meeting with them like, “I wish I knew this 10 to 20 years ago.” So, I provide a lot of financial planning seminars to different teaching hospitals in Southern California, and that’s how I meet the majority of my clients.
Josh Mettle: That’s great, and I can attest 2006 was a very interesting year for us, too, in the mortgage world, but at the same time, it was probably a great time to get going because it was at a time where our clients needed us the most, so interesting but also a great time in another way.
Alisa Le: Great, definitely. I mean, it’s really no secret that doctors are among the highest income earners in the U.S., despite the fact that physicians, dentists, healthcare professionals tend to overpay on income taxes, under save for important financial objectives, have unnecessarily high levels of debt, have little overall levels of asset protection, and they’re – because it’s no secret that they’re high-income earners with little financial education and training, they unfortunately are the target of predatory lending scams and lawsuits. With busy professional and personal lives, they tend to live high levels of financial disorganization unfortunately‑
Josh Mettle: Yeah.
Alisa Le: And this just leads to levels of frustration. So, that’s another reason that I’ve focused on educating doctors at the residency and fellowship stages in their career.
Josh Mettle: That’s a great time to start working with them, and a lot of our clients come to us about that same stage, and I hear many of those similar comments where they spend so much time and energy and years into studying how to practice medicine and to pass those types of tests that focus is so finite, is so specialized that they tend to lose sight of other areas. And so, that’s really in a nutshell is what you just said is exactly the reason that we created this podcast is because we wanted to find and we wanted to bring forth as many experts in that field as possible, and I appreciate you being one and helping us get out this information.
Alisa Le: Yeah, and specializing in healthcare professionals like you it sounds we both created a big network of legal, accounting, real estate, banking, insurance, and all other professionals that are also specialists in serving healthcare professionals.
Josh Mettle: Yeah.
Alisa Le: And so, we see ourselves as meeting the doctors when they’re still in their education and training, and then, as their life changes and different concerns arise, we’re helping them build their team of financial experts‑
Josh Mettle: Yeah.
Alisa Le: As they become relevant in their lives.
Josh Mettle: Awesome. Well, there’s a bunch more question along those lines that I want to get to, but there was one thing in your bio that got me that I just would love to hear about. I see that you are the founder and president of Philanthro Production San Diego. I’d love to hear about that, and can you tell us maybe just a little bit about your vision there?
Alisa Le: Of course. It’s a 501(c)(3) nonprofit organization that’s really reached heights beyond what I ever originally imagined. The aim of that organization is to make philanthropy a lifestyle for young professionals. We throw community events and parties, and we donate the proceeds to a different charity with each event, and we raise funds and awareness for different causes to publicize them to the young professional community of what causes are out there, and where they can donate their time and money to. So, we’re just basically providing an easy and fun way to be philanthropic because volunteerism drops dramatically after high school and college and doesn’t really pick up again until late adulthood typically when well-off adults can afford $200 of putting hours and maybe have fun [laughter]. We just work to provide an opportunity and an outlet to give back for young professionals, who don’t have as much time as college students or as much money as those established in their careers.
So that’s the initial purpose and mission of the organization, and the second and most accidental purpose and byproduct of the organization is how Philanthro helps its actual members. We’re 100 percent volunteer based, so everyone has fulltime jobs or is pursuing some type of degree, usually a professional degree, and we donate our time by putting together these events and it’s really the actual members of the organization that gets the most out of it. It’s a way for its members to build skills in other areas outside of their key jobs, build their resumes, and meet like-minded young professionals in several different industries on a regular basis. So, we’ve had a couple of med school students, I remember, who were able to use their Philanthro experience to get matched to the residency program of their choice to make themselves stand out a little bit. So, med school itself ‑ I still can’t believe that they were able to donate as much time [laughter] to the cause, but they did. And so that’s twofold: to continue to provide young adults with a way to give back and force members to build skills in areas that they usually couldn’t get in the task or current jobs that they’re in.
Josh Mettle: That’s very cool. Kudos to you in putting some time aside to do that. I just want to commend you for that. It’s incredible.
Alisa Le: Yeah, thank you. Besides San Diego, we also have chapters in Los Angeles, New York, Seattle, and San Francisco. So, there’s the website philanthro.org that you can either attend a future event or consider membership if that appeals to you.
Josh Mettle: Excellent. Cool. Well, I want to jump in if we could to the two things that I think probably are the heart of your advising platform and probably what most of your business is based around from what I know, and that is the Living Balance Sheet, and what really caught my eye was the 300-plus clients that you helped create Life Visions. So, can you kind of weave those together for me and then maybe wrap up with a story or two that you may have about some clients that you’ve been able to help with these tools?
Alisa Le: Sure. The Living Balance Sheet, I’ll explain that first, is an online aggregation tool that we provide all our clients to organize and strategize their financial plans. So, it allows us to work easily and coordinate with all of our clients and all of their legal, tax, mortgage, and banking advisors who are located all over the country, and so, I’ll tell you the story about two doctors and how the Living Balance Sheet has impacted their life.
Josh Mettle: Great.
Alisa Le: So, the first one would be a doctor here in California. We met him while he was in residency at UCLA, and throughout the years, he needed minimal help, especially in residency besides getting proper insurances like disability insurance. And in the last year and a half, it was very hard to schedule with him and his wife to discuss their comprehensive plan now that they had two children, ages 2 and 4.
Josh Mettle: Yeah.
Alisa Le: But remained persistent but not pushy. We typically do to get them in our schedules as we accommodated their busy schedule, and when we do our planning, we always plan with our clients living a long life. But of course, we also want to include a hedge in case life doesn’t go exactly as planned or you don’t have as much time as we think. And one of the first recommendations that we made for him and his family is to build his protection because in our opinion and philosophy, it doesn’t matter how much you have in your savings, investment, or retirement accounts if your insurances aren’t properly structured, and you have a loss in your life and you can lose everything that you’ve been working for. So, one of the recommendations we had for him is to get life insurance for what’s called for human life value or the most that he could, given that he had two children tossed on a specialty practice that he was building, and his wife didn’t really like the idea that she actually wanted to put it into a 529 place with the money that they would be spending on the premium for that. And so fortunately, she and he took our advice and the reason that I say that is because in August of this year, he at age 37 had a heart attack without a history of heart attacks.
Josh Mettle: Oh, my gosh.
Alisa Le: Yes. And we were as shocked as anyone because the year prior, he has been approved for the highest rating for his life insurance. My sister had actually saw him the week prior to get some dental work done.
Josh Mettle: Oh, my gosh.
Alisa Le: And completely really just out of the blue for even the family, and of course, very a traumatic and difficult time for her, but we were able to be there for his wife and his family at the most difficult time in her life. And so, because of what the Living Balance Sheet allowed that we had all of their trust and estate planning documents, their life insurances, their deed for the home and practice like everything was organized in the Living Balance Sheet one year, which isn’t very common for most people.
Josh Mettle: Right.
Alisa Le: Most people have their things, all of their financial documents and decisions in different drawers all over the place.
Josh Mettle: Right.
Alisa Le: And it creates a very messy thing when you don’t know where things are placed, and she said, “You know, I have so many things to worry about right now, but I’m glad that I don’t have to worry about the finances.” So we, with the $4 million life insurance benefits, she’s going to be moving back home closer to her family and going to buy a house close to her family and the children at least financially will be whole, even with the change that their life will have moving forward.
Josh Mettle: Man. I have a 2- and 4-year-old, and I’m sitting here, staring at their photos as we’re having this discussion, and we all kind of think we’re invincible especially when we take good care of ourselves and we get regular checkups and we work out and do everything that we think that we’re supposed to do to be pillars of health, and man that is just a frightening story and as you said, had you not been persistent, had you not got them in there to confront those things, which is I get it. I have a 2- and a 4-year-old, and getting into all that stuff organized is a little bit of work, but man, good thing you did. That’s a powerful story, Alisa.
Alisa Le: Well, thank you, and their story has made me more persistent every day.
Josh Mettle: Yeah.
Alisa Le: Because of our experience with them. So, I never feel like I’m harassing or being too pushy like when I did before.
Josh Mettle: Right.
Alisa Le: There is of course a fine line, but I have that in the back of my mind to make sure that people do take care of the important amongst all the urgent in their lives, so.
Josh Mettle: That’s a great way to say it: important amongst all the urgent in their lives. That is a great way to say it. Well, thanks for sharing that one with us. That’s powerful.
Alisa Le: Yeah. That was an example of a client who unfortunately didn’t have enough time.
Josh Mettle: Right.
Alisa Le: I’ll give you a contrasting example here of another client who did have more time, and he is a general dentist client who’s producing $1 million of revenue a year in his general practice in a time where all other dental practices are around him were typically producing less. So, he was definitely and still is really an anomaly.
Josh Mettle: Wow.
Alisa Le: And his problem is that he was making a lot of money, but he had no idea where everything was going. So, the Living Balance Sheet actually helped him get organized and allowed us to easily discuss his situation with other advisors like a CPA, a business maker, and an attorney. So, his CPA was the same CPA that he had since he’s been in dental school. And so, we had a dental-specific and medical-specific CPA look at his tax returns and his balance sheet, and he was able to free up $50,000 immediately through a review of his tax returns, and he was actually structured as a C Corp paying double tax, and so we made the transition to move to an S Corp. So, immediate return right there has been to review his debt structure that saved him $10,000 a month, and his estate planning attorney was easily able to see what holes needed to be filled in his legal documents.
So, besides making it easy to coordinate with other advisors, it also helps us easily explain and educate what inefficiency and gaps there were in his insurance, savings, and investment planning. So, with that freed up money, he was able to have at least working funds and redirect it to other savings and investment opportunities that fit his objectives, and we’ve been working with him for a few years, and now that we’ve gotten his financial foundation in place and of course completely protected because that’s what we like to do first, his foundation is what he calls rock solid, too. Now, he can just focus on building his liquidity and looking for opportunities on how to be more profitable.
Josh Mettle: That’s great. Well, I want to part on that in just a minute and say a couple of things from my perspective, and that is that it’s interesting to me sometimes when I see the most profitable, highest income earning physicians and dentists, there is a–the correlation is missing to the highest net worth, and you said exactly what I have seen in the past where there is a lot of income flowing in the front doors, but somehow the backdoor is open and the fan is turned on and the money is blowing out and they just haven’t been able to ‑ they get so focused on creating and earning more income, and I’m guilty of this myself by the way, but we take focus off of where that’s going and how it’s being built and really the focus needs to shift, which is what I love about your Living Balance Sheet is that when you walk me through that online, the first thing you see is your net worth which really‑ who cares what you make. If you’re not increasing your net worth, you’re not getting anywhere. You’re not getting any closer to being free of the rat race, being free of working every day. So, the focus on net worth, especially with high-income physicians and dentists, is so critical and I love that about the Living Balance Sheet.
Alisa Le: Yeah, and the net worth is something we don’t physically visit on a daily basis. I mean we live in our monthly cash flow. With our income we take in every month, if we can cover our bills, go out to a couple of nice dinners, maybe to a movie without too much strain, then we’re happy. But it’s when we make the major life decisions, purchasing a home, when we’re going to retire, when we’re going to purchase a car, things like that, that we needed to look at our net worth and look at our balance sheet. And so, you come to one of those decisions or the need to make one of those decisions. You kind of just stay in your monthly cash flow and don’t think about that.
Josh Mettle: Right.
Alisa Le: So, like you said, the net worth is so important. I think a lot of people don’t realize that because the net worth actually reflects every financial decision that an individual has made, a family has made, and that’s what’s going to determine the ability for someone to make those huge life decisions like when to retire, what kind of real estate to purchase.
Josh Mettle: Yeah, I love that. That ties into I was just thinking as I’m looking at your website the quote by Henry David Thoreau that says, “Wealth is the ability to fully experience life.” So, at the end of this many-year career and many years of education and high income, there’s got to be some wealth there, so that you can go and experience and enjoy life, and so I love that you guys are so focused on that aspect.
Alisa Le: Yes, definitely. I mean the reasons I pursued a financial services career is because my parents were really good at making money but handling it and managing it, the worst. The number one thing couples fight about is money, and my parents were the quintessential example of that [chuckle], and I know if they knew how to handle their money instead of their money handling them, they would have led a lot happier lives, and the lives of their children would have been more happier, too. So, that’s why I see physician-dental healthcare professionals, they’re one of the hardest working people in our nation, and they sacrifice and invest so much and delay gratification. Then, they come into money really fast ‑
Josh Mettle: Right
Alisa Le: As their life continues, they never get a chance typically to slow down and really think about for the sake of what I am working for.
Josh Mettle: Very good point. Well, I’m guessing that’s going to bring us to Life Visions, and I’m dying to get a feel for what this is, so help me with that. Tell me what the Life Visions.
Alisa Le: So, I think a lot of professionals that we meet with initially are surprised that in our first conversation, it’s more about what they want to create in the next three years, five years, ten years beyond, like I ask them those types of questions first before we get into any numbers or recommendations, strategies.
Josh Mettle: Right.
Alisa Le: So, our intention is to really help our clients find out really what’s important for them individually, as a couple, and then create a wealth strategy to attain that vision. And for I think the majority of clients that come into us, they give us a bunch of facts. They’re like, “What should I do?” [laughter].
We’re like, “Wait, wait, wait, wait.” We’re kind of going a little bit backwards there, so whatever is important to them. Is it owning their own surgery center or dental practice eventually? What steps do we need to take to best prepare them for that? If they want to work less days eventually to be with the family and take some time off. We’ll work with what they have so far to make that possible for them, or we’ll give them a realistic notification that we’re going to have to really pump it up if that’s going to be realistic and available for you.
Josh Mettle: Right. I think the reason why the Life Vision seems so interesting to me, and I love that you start off with those questions, is that I remember a coaching group, a professional coaching group of which I am coached, and one of the very first things that I did in that endeavor was they made me create a life plan, and in that life plan, you envision where you want to be with your spouse financially and with children in 10, 20, 30 years, and then, you share that with your spouse, and then, you kind of recreate it and what it does is it allows you to link in your perspective. So, instead of looking at well that’s a really nice red Porsche, right. That’s cool for a couple of years, but if that’s not lined up with where you want to be in 20 years or 30 years, then you can find yourself kind of being blown this direction or that direction through life and never really on track for where you want to make it 20 or 30 years. So, what I think I’m hearing you’re saying is first, we got to get clear and we have to probably have agreement between husband and wife or whatever the relationship is that that’s where you want to end up. And then, if that’s where we all want to go, then, when we start building the platform, making sure we’re secure, insurances, and building the investment vehicles to get us there.
Alisa Le: Yes. It couldn’t have said it better myself, yeah.
Josh Mettle: Well, having gone through that somewhat, just from my coaching and business perspective, I haven’t gone through it with you from a financial perspective, but I know that that vision before action is incredibly powerful and keeps you grounded and keeps you on the right track, so that’s really cool. Well, you mentioned something a few moments ago that I just want to hit on one more time, and that was you alluded to the B word, which of course, the B word is budget, and nobody likes that word, but it is a vital word. If you read any good book on financial literacy, the first thing that they’re going to say is that you have to save and you have to live within your means, and then you can start learning about investing, but really the first step is to learn to live beneath your means. The richest man above all jumps up to me there as I think that’s the number one first rule. So, talk to me just a little bit just about the B word and how you bring up budgeting to your clients and do you have kind of a general model that you advise clients to follow as far as percentage of income going one place or another?
Alisa Le: So, great question because I think the B word is what scares a lot of people to meet with a financial planner.
Josh Mettle: Right.
Alisa Le: They don’t want to be budgeted and told to enjoy their lifestyle less.
Josh Mettle: Right, right.
Alisa Le: For doctors, it’s really not that they need too much help in making money, making more money.
Josh Mettle: Right.
Alisa Le: It’s more like they need more help in keeping the income that they earn, protecting it, and making sure that the money that they have is working for them, so different than say most of America.
Josh Mettle: Right. Absolutely.
Alisa Le: They are in a completely different income situation, and so, our focus is really not the budget typically and we focus more on reducing unnecessary debt and insurance costs, and that is already being spent anyway, so in that example of the dental practice owner that I shared. I mean, he has $10,000 a month that could have been restructured, and he didn’t realize that, and that was pushed to a higher and better yield, and everybody’s property and casualty insurance, even down to their auto and homeowners insurance and making sure they have enough protection, but they’re not overpaying for it also and redirect any savings there, any inefficient overpayments of debt or we work within money that’s already been spent not towards lifestyle but towards our fixed expenses to see if we can get a higher and better yield from that, and we also try to minimize your tax costs, not just everywhere like the CPA does, but we try to save you as much tax over your entire lifetime. So, that’s where we focus on first, and just clients would like us to help them with the budget, then we do, but that’s really not typically most of our clients really need helps. And so, most people wouldn’t be very happy with me as every time we meet with them, I will tell them not to go in many vacations [laughter] the cable, budget your toilet paper, so I try to avoid the budget if at all possible.
Josh Mettle: Yeah. And so, let’s just talk about allocation then. So, let’s say that I am that dentist bringing in $100,000 a month, do you have kind of a model or a suggestion of here’s what I would like to see you – I totally get that the first thing that we want to do is the biggest expense in any of our lives is going to be taxes. So, we start there. We go through all those fixed expenses like you talked about, why is your mortgage at 7 percent, your student loans are at 6.8 percent. You go through all of those pieces, but then, at some point, I’m assuming that you’re going to make a recommendation or give some sort of guidance or encouragement on how much of that $100,000 a month coming in the front door should be going towards some sort of an investment vehicle. Do you have kind of a general guideline on that?
Alisa Le: Right, yes. So, 15 percent to 20 percent is our guideline, and not everyone can do that right away. So, there’s a huge gap between what they’re actually doing and that 15 percent to 20 percent. We work with them to get to that point over a period of time.
Josh Mettle: Yeah. Yeah, I think that’s good. I just know from my personal net worth, and my personal ability to save, once we got a goal like that where we we’re going to pay ourselves first where it was going to be money that was actually saved versus money passing through to some other debt or to some other expense, but once we said, “Okay. When the money comes in the door, the first thing we’re gonna allocate is savings, and whatever vehicle that is, and then, we’re going to have what’s leftover to pay everything else.” So, it sounds like that’s the kind of philosophy that you guys have.
Alisa Le: Yes, that’s the thing.
Josh Mettle: Great. Well, I love your story in that what brought you into financial planning was something that you learned from folks and how you wanted to improve upon which you saw there. It appears to me that you are definitely deeply committed to financial literacy and the success of your clients. Where else does that come from? Is that anything else besides your folks that brought that out in you or has that really been the catalyst?
Alisa Le: Yes, I know if I was in any other career, I’m still be researching and studying the topics I teach my clients every day about, I do get a deep satisfaction educating clients on topics that they’ve never taken a class on. So, that makes me make the most educated and grounded financial decisions because that makes a longstanding impact on financial decisions that we make each day on their lives and that of their families, and a lot of the time, we’re just going through life and maybe reacting to decisions instead of being proactive about them, and we don’t understand all the implications and consequences that a particular decision makes on all our future opportunities.
Josh Mettle: Right.
Alisa Le: So, I mean I feel like financial decisions, aside from health decisions, are the high-stakes game we have in our life.
Josh Mettle: Absolutely.
Alisa Le: If we make a wrong move and we lose, we can devastate not only our own lives, but also the lives and the happiness of all of our family members, too.
Josh Mettle: Well, between your story of your parents growing up and learning that lesson and being probably polarized or focused on improving that what you’ve learned from and the powerful story you shared with us where the doctor that attended UCLA with the young children, it’s impressive that your focus is definitely felt and I think you’re doing a great job. So, I want to thank you for your time and for sharing the Living Balance Sheet and life vision, and if our listeners want to find out more about you and the services you offer, where can they best contact you or find that information?
Alisa Le: So, if you Google my name, Alisa Le, A-L-I-S-A, last name L-E, my website is the first thing that appears, and all of my contact information, services that I offer, more about Pacific Advisors, is located on the website.
Josh Mettle: Great, and would you just one more time give the contact information for your Philanthro Productions?
Alisa Le: Oh, yes. So, the website is philanthroproductions.org.
Josh Mettle: Excellent. Well, it’s been exciting. I appreciate your time, and it’s really been a pleasure. We look forward to connecting with you again soon, Alisa.
Alisa Le: Thanks so much for the opportunity, Josh.
Josh Mettle: You’re welcome.
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