Show Notes

Kayla: Welcome back to the Designer Practice Podcast and I’m your host Kayla Das.

In today’s episode, we’re going to be discussing a really important topic when it comes to running a business. And that’s finances, but it doesn’t start with business. It’s a part of incorporating financial literacy as a part of your life.

To guide this discussion, today’s guest is Robin Valadares, physiotherapist and owner of Financially Fulfilled Physio, who’s going to share some helpful strategies that can help you boost your practice income and quit trading time for money.

Hi, Robin. Welcome to the show. It’s so great to have you here today.

Robin: Hi Kayla, thanks for having me on. I’m very thrilled to be here. Anytime I get the opportunity to discuss this kind of information, I will do so in space. So, thank you for the opportunity.

Kayla: Fabulous. And Robin, we actually met in May at a Jane app event. And for anyone that doesn’t know who Jane app is, it’s a practice management system. And we’re actually both ambassadors and users of the Jane’s practice management software inside of our own businesses.

Robin: Yeah, that’s right. We serendipitously met across the country in Vancouver. And what I really enjoyed about that meeting and or event is that you got the opportunity to meet a lot of like-minded practitioners in different fields of health care who also have different kind of ventures aside from clinical or traditional practice. So, I think you and me are both in that bucket where we have kind of adjunct like you’re doing this podcast outside of your traditional education and social work.

Kayla: Yeah, and it was fabulous to meet other professionals in the field at the event and to connect with you specifically so that you’re here on the podcast today. So, I’m super excited.

Introduction

So, before we dive in, tell us a little bit about yourself, where you’re from, what you do and who you work with.

Robin: Perfect. Yes, absolutely. So traditionally, you can think of me as a physiotherapist who’s done the conventional route of obtaining a physiotherapy license here in southern Ontario. And I’ve been practicing in this field for the last 11 years. Non-traditionally, you can think of me as a financial literacy educator, someone who’s gone through the self-education route, trial and error, losing money, making mistakes to learn about things they don’t teach us in school. So much so that I had such a great passion for it where I launched an online education business to educate other health professionals on some of the pitfalls that they might make in their 20s or 30s or their 40s that I did at least in my 20s that you don’t necessarily have to so you can set up your life. Kind of on your terms.

Kayla: So basically, we’re learning from your mistakes.

Robin: Absolutely. That’s where you get the best education, right?

Defining Financial Literacy

Kayla: Yes, for sure. So first of all, what is financial literacy? And why is it important for therapists and coaches?

Robin: Great question. And I think it’s your relationship with money and it’s the concepts of budgeting, investing, planning. These kind of three major pillars are where you’re literate, you understand the basics and then you can apply it, whether you do it yourself or you hire it out or entrust it to an individual who specializes in one of the three or all three of those pillars.

Kayla: So, I know, and I’m not going to stereotype here, but I’m just going to say me as a social worker, I am not really that great with math. And I have heard from other social workers that we might not always have the strongest math skills. So why is it important that we understand financial literacy and how can we support ourselves in better understanding what that might look like if it doesn’t come easy for us?

Robin: Yeah, and you’re right. I think the misnomer is that with finances equates you have to know the quadratic formula and do long division on a napkin, which fortunately is not the case anymore. It used to be when we didn’t have the advent of computers or calculators or even AI at this moment.

I think the main thing is understanding what the jargon or the verbiage is so you can stay up with the conversations and knowing what may be an ETF versus a bond, what a debt is, what a credit is, those basic terms. And then understanding how to find resources, whether it’s online resources or individual or professional resources to then seek knowledge.

The shortcoming I find people do is they don’t think about anything, don’t even learn the basics and they entrust their finances and therefore their time and their hard work, blindly to achieve mediocre results and then look back in hindsight and said, I should have, could have, would have done it differently.

Kayla: And I know we’re going to get into a little bit on what some of those things are, because some of those words you said, I know I don’t know what they are, so I’m sure listeners don’t either. So, I think that’ll be so great to dig into some of that.

Gaps and Hurdles Practice Owners Face

So, when it comes to financial literacy and finances, what are the gaps and the hurdles that you see when working with practice owners starting out in private practice, and probably even when they’re starting out for the first time?

Robin: It’s they either do not pursue it or want to educate themselves or they push it off, hoping it will work out in the end. They understand that it’s important, but they say, “Oh, I’ll address it next quarter or next year,” or “I’m making ends meat right now and doing well. So, I’m assuming things are working out well,” tend not to address it sometimes to the detriment where they say, “Okay, I’m going to use my parents’ accountant or my parents’ financial advisor because it worked for them.” But as you know, our times are very different than 30 or 40 years ago when our parents were going through the economic areas of environment. So, I don’t think we can rely on what’s worked in the past because it may not work in the future. So, either dismissal or assuming that things haven’t changed and they’re going to. keep on with the same priorities that their parents did or their peers did previously.

Financial Literacy Education

Kayla: So how can therapists and coaches start educating themselves in these topics and maybe even giving some examples of ways that you and your clients have incorporated some of these into your businesses?

Robin: Yes. So traditionally what I’ve done is the academic route and the self-education route, and that’s by mediums like podcasts, like newsletters, like books. So that’s kind of the tradition where I just go knee deep into that material. And then the non-traditional is kind of the trial-and-error aspect of life, doing things, making mistakes. I think one of the biggest barriers for most people is that fear of failure. And a quote that I love is “fear will kill more dreams than failure ever will.” Just the thought of failing puts people in their seats and not making an actual financial move. So that’s the non-traditional is, making small mistakes, finding a network of individuals who’ve done it before that you want to emulate and going up to meetups, whether it’s real estate meetup or crypto meetup or a Jane meetup where you meet other individuals, like minded days. Those people will give you other avenues or things to pursue that you may not have considered before because this may be non-traditional.

Diversifying Practice Income

Kayla: No, that makes sense. And let’s talk a little bit about specific ways that we can diversify or invest in potentially generating additional income. And I talk about passive income a lot on the podcast, but you use a lot of different words that I didn’t know. So maybe incorporating some of that lingo into this episode might be really helpful to help educate all of us.

Robin: And I think it’s ever more pertinent since the pandemic, especially in 2020. Our clinic here was closed down due to those rolling lockdowns. And I was fortunate in that aspect that I had some other revenue streams to satisfy my weekly and daily obligations. Like my mortgage didn’t go away. My property taxes didn’t go away. Property insurance, heating, utilities, food. Those are still obligations I had to meet to survive. But if I couldn’t work at no fault of my own, what could I do? And I’m fortunate that I have revenue streams. Traditional revenue streams, aside from practicing or trading your time for money would be something like ownership of a clinic, potentially. It wouldn’t work well in the pandemic era, but outside other areas, you can have people who work for you. And I think what most people or clinicians will do is own a clinic. A little more hassle factor because you’re dealing with a lot more nuance there.

But other avenues are rental properties, whether they’re long-term rental properties or short term like VRBO or Airbnb. That’s what I’ve done, continue to do so.

Another revenue stream is trading something called stock options, and that might be higher level, but you can seek individuals who have professional courses that kind of dumb it down to layman’s terms that I’ve taken, and I use that, especially right nowadays, in between clients. So, let’s say I have a client who no shows a late cancellation, I can go on my phone, which is location dependent, and make a trade that can earn me some revenue, even though I’m losing out revenue clinically, traditionally.

And then there’s dividends. Dividends is a type of cash flow you get from owning an equity traditionally that pays you to own it. That’s passive. I just buy the stock and it pays me a quarterly dividend. So those are some of the traditional avenues to earn a secondary revenue stream, which I think is ever more pertinent nowadays.

You could do a side hustle. I like to bake, so I have a little baking side hustle. It doesn’t make me much money at all, but it’s something that brings me enjoyment, which is something valuable too. So, I think it’s ever more available this day and age when you have basically a big computer in your phone that you can do many things and earn additional revenue streams. You just got to take action.

Kayla: I love that. I have currently five passive income streams and they have really helped me. They’re none of what you have listed but you may, you’re making me think here. Although I will say getting a rental property and Airbnbing is something me and my husband have been considering. But in saying that I have five passive income streams and they’ve been really helpful because there’s times where I need to take time off or a couple of years ago my grandmother was sick. And as a result, I had to cancel all of my sessions for three weeks. That was something that was unplanned. It wasn’t prepared for, but it was my passive income streams that supported me during that time. And at that point, I believe I only had two or three, I think it might’ve been three passive income streams at that time. So, I’ve built a couple more in since.

When we think of this idea of trading time for money that although many of us therapists go into it because we want to help people and we can help people in multiple different ways. And traditionally that one to one working with people in a therapy session. But having these additional passive income streams can really open up, you can start having that freedom in your business. You can start doing the things you want to do. You can still do one to ones, but you don’t necessarily have to have that be the only thing within your business that keeps you feeling stuck.

Robin: Absolutely correct. Because your one to one is based on the time allotted to that, and time is very finite. So, if you can have one to many, you can empower many more individuals with that same unit of time. If you have the opportunity, why not do that? And you can also do it in an adjunct profession that’s maybe different than your traditional, but still lights you up and gives you quite a bit of passion. So why not pursue that too? because if you want to help people, you also not want to enjoy what you’re doing because the way you act and interact with that person will show how much you enjoy what you’re doing. We all have been to many clinicians or even other professionals. We know, “Oh, this person hates their job.” And it really shows. And do you want actually engage those people who do not like their jobs or their careers? No. Right? So, you want to be able to do something that you both enjoy and you can service the people that you’re serving.

Kayla: 100%. And I know there might be some listeners listening and they heard you talk about dividends and stocks and that might seem very, very intimidating. I’m hearing those words. Because we’ve all heard those stories about stocks and bonds and avoiding the stock market and all of those types of things.

So, if someone were interested in learning more about this and what that might look like, do you have any advice for them or even just any insights or direction on how they can start educating themselves and becoming more financially literate in that area.

Robin: Yes. I do it three ways because I learned differently depending on the platform that I’m consuming. So, I’m very much a visual learner and that’s where YouTube has been really helpful for me. And I basically have a YouTube university degree, shall we say, and I use that. And you tend to hear certain terms over and over again, both with visually looking at YouTube, but also auditory with my podcasts, I listened to. I’ll hear a word like an ETF, then I’ll stop on my walk. I’ll pull out my phone and type it into Google Chrome. What the heck’s an ETF. And typically, there is this one website that I frequent often. It’s called Investopedia. It is basically the Wikipedia of finance. And they do a fabulous job of really distilling complex concepts to layman’s terms. And I’ve used that countless times where I look up a term. “Okay. I heard it here. I saw it there. I read it there. Now it’s making it second nature to me.” so I don’t think there’s a really much of a barrier right now to seeking information because it’s in multiple sources.

Even TikTok individuals who are 19 years old are making TikToks about ETFs and bonds and mutual funds. What they invest in is a different story, but understanding what the basic material or the vehicle is rarely available.

Investments and Private Practice

Kayla: That’s really great to know because when we think of investments, I hear from therapists, especially those starting out that don’t necessarily have the money or the capacity or the capital or just anything to be able to start investing into large things like say rental properties and things.

So, when it comes to even preparing to start investing in these, do you have any advice, insights or best practices that can help therapists and coaches start moving along with adding some of these things into their practice and their life?

Robin: Yes, I do. And I think many clinicians want to put the cart before the horse that way, but I think it’s important before you start to invest. Can you invest? And the reason I say that is, do you have actual income or cash flow at the end of the month to invest. And people say, I have no idea because most often they don’t keep a personal budget. They could not tell me what their monthly income is or what their expenses are and where their expenses are going. So, if you do know if you’re in a surplus or a deficit or you’re coming out neutral. If you do not have money to invest then that’s the first issues understanding that.

Then you have to also understand if your expenses are something like a credit card bill that you have to pay them 20% monthly interest. What is the point of investing to get maybe a 7% or 10% interest when you’re bleeding 20% each month? It doesn’t make any sense to me. I would first, in my opinion, I would go pay off the consumer debt at 20% or 15%. And then when I have fewer debts and certain types of debts. Then I would only go into investing. Then I would understand what the heck investments are, what’s an ETF, what’s a bond, what’s a mutual fund, what’s an equity, then I’ll go down that rabbit hole. But if you don’t understand where your financial houses are, and how it’s built on that foundation, there’s no point putting any layers on top of that.

Kayla: No, that makes complete sense. And I like that you connect it back to, first of all, understanding, do you have the money, but then also, are you in debt, because sometimes we think of, “Oh, I need to start preparing for retirement” or whatever. But if we’re still in that stage where we’re paying off certain levels of debt, it’s important to start paying those off first, especially if they have higher interest rates.

And something you mentioned before, too, was you mentioned how the pandemic has really changed the outlook on just finances and private practices and like how things are ran. I am not an economic expert here, but the interest rates are now up in Canada. And I believe in the US as well. And here, we have probably one of the highest interest rates we’ve ever had. And with that, having more debt is going to obviously incur more interest as well.

Preparing for Inflation

So, I guess my question and connecting all this together is, with all of this, how can people start preparing, knowing that interest is going up, knowing that food prices are going up, knowing that there has been a shift in how we even run our private practices due to the pandemic. How can we start diversifying our income today?

Robin: Yeah, it’s ever present right now with what happens to the pandemic. And you have this rise in inflation, which is basically the debasement of your purchasing power, meaning your dollars’ worth less every incremental day or year. It’s not providing for the same value of goods because it’s costing more. And what happens in that economic environment that we’re currently in things cost more and the cost of borrowing, which is the cost of lending goes up. So right now, I can speak based on mortgage rates you’re looking at between what 5 and a half to 7 percent to own a particular mortgage.

But here’s the interesting aspect of it, if you have owned assets throughout the pandemic your net worth how much you are worth your assets minus your liabilities has increased because as the price of things go up. It takes more dollars to purchase a certain thing. And a great example is your house. My house in 2020 had the same four walls as it does now. So why would it go up in price? Is it because my house is more valuable with those same four walls? No, it takes more of my dollars to pay for that same house because my dollar is worth less. So, I inherently has gone up in net worth, not because my house is more valuable in the last three years. It’s going to take some more dollars to pay for it. So, I’ve owned this asset and it has appreciated. So, one way of getting ahead of inflation is owning assets.

But that’s the issue for some people is they can’t own an asset because they don’t know what their income is, what their budget is, they can’t invest. So they tend to consume goods. When you consume goods instead of invest, you are going to be caught with consuming things that are going higher and higher in value. Therefore, your net in terms of what your spread is, is going to be zero because you’re paying for things that depreciate.

When you pay for things that appreciate, like you own assets, they will appreciate or increase in value with higher rates of interest. And a good example of this also in our system in Canada is that you might have a checking’s account or a savings account with a big five or six bank. And let’s say you have a $100 put in the savings account, the bank might probably give you 0.1 or 0.2 interest for keeping their money there. Inflation is 4, 5, 6 percent. What is 0.1 or 0.2? It’s nothing. You’re losing your purchasing power.

But little do people know that something called a money market fund or a Canadian bond that might pay them 4 or 5 percent, you can use that same $100 and get 5 percent. At least now you’re keeping up with inflation, you’re not losing your purchasing power. But if you don’t educate yourself on that, you’re losing your purchasing power just every day that passes by.

Identifying Assets

Kayla: I love that. Can you give us some examples on what assets might be and some other things that we might think are assets but are actually depreciating and may not necessarily be serving us? Or not serving us to the level that we think it is.

Robin: Yeah, and this is where I will stem back to the book called Rich Dad Poor Dad by Robert Kiyosaki, and this is the definition I adhere to. An asset is something that puts money into your pocket, whereas a liability takes money out of your pocket on a monthly or frequent basis, whatever it is.

So, a rental property, for example, not a primary residence, but a rental property, if I structure it well enough, the rent will cover all the expenses and leave money in my pocket at the end of the year. And that is a cash flowing asset.

Whereas a car that I use primarily for personal reasons will soon you’re driving off the lot. If it’s brand new, you’re losing 20 to 30 percentage points on depreciation. And then you have to factor in maintenance on top of that. And then gas, if you’re using a gas car. So that’s taking money out of your pocket. And especially if you can’t use that car to earn an income for many people, they do not. So therefore, it’s a depreciation.

For example, you might buy a phone for personal use, that phone, hey, might help you with your TikTok, your Instagram, or your social media, but if it’s not using to earn an income based on maybe running a podcast or learning, that is also decreasing in value. So, you might assume it’s appreciated, but it’s not. Your phone’s not going to be more expensive next year than it is today. Whereas owning a, let’s say, a major Canadian bank that’s appreciated over 10 years, that’s an asset, and it pays me a dividend, so I’m getting money in my pocket.

Kayla: I appreciate that. And I’m not surprised you said car because that’s something that, as many of us, we need cars to get place to place. But personally, a couple years ago when I started working primarily from home, I got rid of my car. Just because I didn’t need it as much. And as a result, I’m saving so much more money. And, you know, it means that I need to take the bus every now and then, although my husband still has his car. But in saying that, what was serving me and what was making me money or what was really draining money that I really wasn’t using or using it to the best of its ability.

Robin: Exactly. And it’s just doing some introspection and an actual deep dive into your own finances. And you might realize, “Hey, where am I allocating money? And where can I trim the fat? Or where can I start to add more in because it’s providing some actual returns?”

Incorporating Passive and Financial Income in Private Practice

Kayla: 100%. So is there any additional advice, insights, or best practices that you would encourage listeners to think about with respect to either diversifying or supporting themselves within their private practice so that they can start moving away from or at least decreasing the one-to-one services so that they can start incorporating more passive income or additional income into their business.

Robin: Yeah, I like that question because it what I think people should do. And this is not advice in that respect. But I think if it’s really hard to run a business, if your own financial personal house is, let’s say, quote, unquote, on fire, because you start to do things to the business to satisfy your own obligations. So, the way I see it is, hey, understand the personal finance aspect of it. So, then you can satisfy your obligations, then build out the business in terms of, hey, it can run its own entity and you don’t have to keep drawing upon it because your own financial house is in order.

And then when you have cashflow in the business, then you understand, hey, certain investments and assets, then you can start to diversify once your business is self-running. Your own house is in order now of extra cashflow, and let’s say, play money, for example, then I can start to diversify to other revenue streams.

But if you’re trying to do both personal finance and that’s a shaky foundation and your business is not very secure in terms of how it’s built out, then it’s tough to really find a diversified revenue stream, because then you might have to cancel that or sell it because the other two things are quote, unquote, lighting on fire again. So, I think it’s starting with personal finance first, building on a strong business after the fact. And then when you have extra income and revenue, then you start to diversify into a whole bunch of different traditional and non-traditional assets. Then you can scale that way versus kind of doing that first because it sounds sexy and it’s glamorous, but we can’t do the basics. There’s no point doing complex on top of that.

Robin’s Free Guide

Kayla: That’s fabulous. So, I know that you have a free guide that you want to give to listeners. Can you tell us a little bit about your guide and how it can help therapists and coaches become financially fulfilled?

Robin: Yes. I created a recession planning guide in the advent of we go through a recession, which any economist is predicting off and on for the last, what, 16 to 18 months with higher interest rates. And these are things that I’ve done in the past to make sure that I can withstand certain crises. And things are like, oh, unexpected expenditures that I didn’t plan for or not being able to work that I didn’t plan for. Can I still meet my obligations?

So, in this guide, I think it’s about 14 odd pages. I take you through four or five different steps that you can do, whether it’s setting up a budget, which I can give you as well, whether it’s looking at your debt and see if you can consolidate or reduce your debt. Whether it’s setting up certain investment accounts or RSP matches and then certain emergency funds. So, you can follow this process. So, when you get to the point where you can start to invest, then you’ve got your own house in order. And now you can say, “Okay, I want to invest in bank stocks or I want to buy an Airbnb.” it’s a planning guide. I think it’s not only salient for sessions, but also for anybody who’s going through the process of their financial journey, so they can form starting spot. Something I wish I would have done when I was 23 years old and exiting school at that age.

Kayla: So, to sign up for Robin’s free, How to Prepare for a Recession Survival Guide, check out kayladas.com/financiallyfulfilledguide

Or simply scroll down to the show notes and click on the link.

Robin, thank you so much for being on the show today. It was so great to have you here and to share some of these insights into finances, diversification, all of the great stuff that sometimes we forget about.

Robin: Thank you very much. My pleasure, Kayla. Anytime I’m given the opportunity and I can impact people’s lives that I wish I had on me, I will do so. So, I’m hopeful people can get some information and take some action. Please take action. Otherwise, no one else is going to do it for you. And I don’t want you to regret this in 5 or 10 years and say you should have, could and would have done it.

Kayla: Thank you everyone for tuning into today’s episode. And I hope you join me again soon on the Designer Practice Podcast.

Until next time. Bye for now.

Credits & Disclaimers

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