Dentist Turned Investor – How Rick Kennedy Found Success in Two Worlds
From fillings to fluctuations, Rick Kennedy’s investment planning journey through the foggy markets of real estate and to estate planning comes to light in our inaugural podcast episode with him.
Rick Kennedy is a high-income dental professional and valued financial advisory client of MCM Wealth. We explored Rick’s inspiring journey in dentistry and his unique perspective on navigating market volatility that considered wealth management, risk tolerance, portfolio management, and retirement income. His dream of becoming a dentist since high school was inspired by a mission to make dental visits a little less painful than his own childhood experiences. Luckily, Rick’s investment strategy journey hasn’t been as painful, thanks to MCM Wealth’s guidance through the ups and downs of market volatility and risk management.
Key Takeaways:
- What led Rick to a career in dentistry
- How and when he started investing and how he approached asset allocation
- How the market plunge in 2008 changed his relationship with money and wealth
- MCM’s role in giving him peace of mind during market volatility
Rick offers valuable experiences and perspectives beyond the discussed topics, providing a well-rounded view of his investment planning. By understanding Rick’s path, you can gain insights into dentistry, investing, managing financial crises, the value of professional guidance, and more.
Get ready for an engaging conversation filled with valuable wisdom and practical advice.
Wendy McConnell: Hello and welcome to the MCM Podcast. I’m Wendy McConnell. Today we’ll be discussing market volatility, and we have Rick Kennedy with us, who is a dental professional and MCM client. Welcome Rick. Thank you for being here.
Rick Kennedy: Oh, thank you Wendy. Glad to be here.
Wendy McConnell: All right, so let’s dive right in. Like again, we’re gonna be talking about market volatility today. So, when did you realize that you wanted to be a dentist? Rick Kennedy: Good question. In high school, I started considering being a dentist and probably looking back as to how I got there, I didn’t have a very good experience as a youngster growing up. My family dentist would come in and see some loose primary teeth and come in there and just pop that right out.
Wendy McConnell: Yank it right out.
Rick Kennedy: Exactly. And I had no idea it was coming. And it didn’t make me terribly happy. So I was kind of dreading going to the dentist. And then when I went to the orthodontist, I had a good experience. And I kind of thought, you know, I’d like to try to create a positive experience for patients coming to a general dentist. And so that’s what kind of got me interested in doing that.
Wendy McConnell: So you’re a nice dentist. You’re not a yanker.
Rick Kennedy: No, that’s a bad word. We don’t wanna go down that road.
Wendy McConnell: When I was a child, they had this little treasure box. It was a literal treasure box, and there were little toy rings and little things that you would get if you had to have a tooth pulled.
Rick Kennedy: Yeah, no, this dentist, he had these little plasters of Paris turtles and things like that, that really didn’t help after the incident.
Wendy McConnell: No, no. Yeah, no, I agree with you. There were a time or two where he told me, “I’m not gonna pull it yet, I’m not gonna pull it yet.” And then, hmm, it’s gone. Yeah. It was terrifying.
Wendy McConnell: So, how has your experience been then as the friendlier dentist?
Rick Kennedy: I’d say it’s been pretty good. It’s not a hundred percent. I mean, you’re not gonna convert everybody, but I think by and large we’ve tried to make it comfortable when they’re coming in. I’ve done some sedation dentistry, so that’s helped those folks who have a hard time to get over their hurdle. So it’s been an overall positive experience.
Wendy McConnell: Okay. Now let’s talk a little bit about investing. What has gotten your interest when it comes to investing?
Rick Kennedy: Probably my experience growing up, my family was more involved with real estate and not so much stocks and bonds in the general market. I kind of look back on that and my father and my mother were products of the Great Depression, and they didn’t see things too positively with stocks and bonds. They were more into real estate. And being right there in the middle of it, I could see and get his opinion on things. And so yeah, that kind of changed how I approached things.
Wendy McConnell: So you didn’t want to follow that lead and go into real estate yourself?
Rick Kennedy: Well, we did as a family, you know, some commercial buildings, some development, so I kind of got into that aspect of it with the family and that, had some ups and had some downs.
Rick Kennedy: You know, I won’t say it is perfect, but I knew I, I kind of wanted to try to do more in terms of investing and spread into the stocks, bonds, that avenue.
Wendy McConnell: What do you think led to your more hopeful attitude about it as compared to your parents’?
Rick Kennedy: probably just being around other dentists and friends and many of them had invested in the general market and, and, I had a consultant that worked quite a bit with us in our practice, but also had recommendations for investing. And they got us involved in some Dodge and Cox, Vanguard Mutual Funds, broad market kind of investment there.
Wendy McConnell: Okay. So when did you start investing?
Rick Kennedy: Well, it got kind of delayed. Buying the practice back in 1978,
Rick Kennedy: I needed a loan to buy the practice. And so I, in getting that loan at that point in time, it was a prime plus two kinds of notes. And as you recall, I think it was right around 1980, something like, so when prime hit 21 and a half, my loan was at 23 and a half percent.
Wendy McConnell: You’re talking about interest rates now?
Rick Kennedy: Interest rate, yes. And so, that basically, my whole payment at that point was interest, right? So, having that burden, it took a while to get through that and that kind of delayed it. So, it was a number of years after that, before we could start putting some money away.
Wendy McConnell: Okay. So, how did you actually get started then?
Wendy McConnell: You had this big loan, it was holding you down a little bit. Did you go in slowly or did you wait and then wanna go all in.
Rick Kennedy: I went in slowly. I just didn’t trust things as far as, in terms of, you know, being able to say, oh, it’s always gonna be going up. It’s always gonna be going up. No, it, it goes down too.
Rick Kennedy: So I, I kept cash, realizing that cash, it doesn’t grow, but it doesn’t go down, you know?
Wendy McConnell: And cash is king.
Rick Kennedy: And cash is king, right. so I had an investment person that I enlisted, for a number of years, and we kind of treaded water, with things. And then the other markets moved slowly so that took time to get there, with that.
Wendy McConnell: So what were your hopes then, when you made your first investment? What were your expectations?
Rick Kennedy: Well, I was hoping things would just go up gradually and everything would be happy .
Wendy McConnell: Okay. How did that work out?
Rick Kennedy: Well, it didn’t really work out quite that way.
Wendy McConnell: Oh, no.
Rick Kennedy: Yeah, yeah.
Wendy McConnell: So, what ended up happening then with the, you know, with your portfolio and the value. I mean, did it start to go up at some point or was it just a mitigated disaster?
Rick Kennedy: I won’t say it went all the way down cuz I was kind of hesitant to get all the way in. So, consequently I had cash and I was able to avoid the big drops of 2008.
Rick Kennedy: But in working with my CPA, Mike Hauss for many years, he introduced me to Jeff with Marin Capital Management. And what was interesting is their
philosophy was, you know, let’s avoid the big dips because when things crash and you have a lot of exposure in that, it takes longer to try to recover, get back to zero and then get positive again.
Rick Kennedy: Mm-hmm. Maybe not hit home runs, maybe hit singles, but don’t take the big drop. And I thought that made a lot of sense. Mm-hmm. , that made a lot of sense. And so that kind of got me going with Marin Capital Management. I wanted to get invested into the market and spread my investment beyond that and beyond real estate.
Rick Kennedy: I was hesitant and so I didn’t put a lot in there and that was fine with me. And, I probably should have put more in to get more involved in it. Of course, I’m glad I didn’t get hit, too bad with 2008, but that was positive there. But yeah, I wanted to get more involved so I could, you know, aim toward my retirement.
Wendy McConnell: Kind of reminds me of Jeopardy. You know, it’s [00:09:00] daily double. You can bet all of it, but if you’re wrong, you’re gonna lose all of it.
Rick Kennedy: That’s a really good comparison.
Wendy McConnell: Yeah. So what happened to your portfolio then when the market did
Indeed plunge?
Rick Kennedy: You know, I had some area in real estate and it continued to be okay.
Rick Kennedy: As far as the market itself, it didn’t take a huge hit, you know, cuz as I said, I hadn’t been in it real deep, and so I didn’t get a lot of exposure to that. And it didn’t, I should say, I also made me wonder what about these banks and brokerage houses and all of them getting involved in this?
Rick Kennedy: it made you feel that you had even less control of these events that happened, and it just made me more hesitant to put a lot of money in it.
Wendy McConnell: Yes. You kind of alluded to it here, but how did it, sit with you when you read headlines like Bear Stearns going bankrupt, the auto companies failing, and then they were even talking about, you know, the treasury having a nationalized, the banks, that’s where the term, you know, too big to fail came out.
Rick Kennedy: Right, right. No, that, hearing that just, made me wanna put the brakes on even more, you know, with that. One apple spoils a whole bunch and that kind of view made me more hesitant with that. Absolutely.
Wendy McConnell: But you didn’t get out right?
Rick Kennedy: Well, I, whatever I had in there, you know, went down. But it wasn’t a disaster because I had a lot of cash.
Wendy McConnell: Okay. So how did your relationship with money change after all of that happened?
Rick Kennedy: Well I got, I certainly wanted to try to find something that would help protect me in those scenarios as much as we could. That’s kind of where the philosophy of Marin Capital Management came through there.
Rick Kennedy: And their, their ideas on this, trying to find, you know, they worked with investments that didn’t totally mirror the, the general market, you know, and that way they wouldn’t be forced to go down in those situations. They would stay a little bit above water, which made a lot of sense.
Wendy McConnell: So they tend to be more conservative and not take a lot of risks.
Rick Kennedy: Right. Or their risk is hedge, you know, in terms of hedging, you know, you, you hedge your risk basically. And that made a lot of sense.
Wendy McConnell: So when the country shut down in March of 2020 with the pandemic, how did you react when the stock market dropped almost 10% on March 12th, and then again 13% on the 16th?
Rick Kennedy: That was a very difficult time. Being shut down and the uncertainty of, of, well, when are we gonna come back? How are we gonna come back? What are we gonna be looking like when we come back? You know? And that, for my team and for myself and my family, there was all a lot of uncertainty with that.
Rick Kennedy: And of course then the market went down and, you know, wow, this is really getting serious. So at that point, I’m kinda looking to see how things are gonna come back. Well, gradually we heard, yeah, we’re gonna come back and we’re gonna, so on June 1st, we were back in the office again seeing patients and functioning really pretty well.
Rick Kennedy: And the team accepted it, for the most part We’ve still seen a problem in dentistry cuz a lot of the, the skilled people we work with, hygienists and assistants, some chose not to come back. Yeah. And so there’s a shortage that makes the whole industry a little bit uncertain with that. But money wise, I thought, yes, crashing now, but our economy was working pretty good before the pandemic hit, so I thought we would rebound and get back on again, which is pretty much what happened.
Wendy McConnell: Surprisingly, right? And, you know, graciously . Yes, yes. So when the market did recover in just a few months, how did that change your thinking about the ups and downs of the market?
Rick Kennedy: It just reinforced to me being able to have some investment that’s not gonna be yo-yoing back and forth with every event that happens.
Rick Kennedy: You know, sure things are gonna go down, but if we have a little softer landing, that would feel a lot better. So I was looking to get involved in more at that point, just because it looked like it made a lot of sense with the hedging ability.
Wendy McConnell: So it actually made you wanna do a little more?
Rick Kennedy: Correct, correct.
Wendy McConnell: And here we are again in 2022. the stock market’s down now 20%. This is the really rare time in history when the bond market is also down at the same time. So how are you thinking through this volatility?
Rick Kennedy: yeah, it looks like everything’s going downhill, but to me, it didn’t seem like it was as bad.
Rick Kennedy: And I think once again, working with Marin Capital Management and their fund, that is able to hedge this issue. They just keep going along in a pretty steady state and avoiding the big dip. That’s what happened, through December into January of
2023.
Wendy McConnell: How often do you actually think about your portfolio’s value? Is it something that really only occurs to you when something major is happening in the market, or is this something that you check on several times a year?
Rick Kennedy: Yeah, I probably look at it, maybe once a week, something like that. You know, see what’s going on and, and check in to see where, where things are.
Rick Kennedy: I’m not driven to it every day and, and, oh no, it did this or it did that. That’s why I have experts to look at it every day.
Wendy McConnell: Right. That’s right. Well, us with the 401k we’re told not to look at it. Don’t look at it. Yeah. Leave it alone.
Rick Kennedy: It’s true. That’s a good point.
Wendy McConnell: Yes. So when you think of your investing experience, do good or bad memories dominate your thoughts?
Rick Kennedy: I think mostly good memories, I won’t say that it’s all, all been negative by any means, you know, I, I think it’s been positive and, and, I, I think. Maybe I should have taken more risks in looking back on it.
Wendy McConnell: Got into Bitcoin.
Rick Kennedy: Yeah. Yeah, right. Yeah, there you go.
Rick Kennedy: Maybe you’ve gotten involved in a few more things, but the same token opens you up to some risk with that. As I’ve gotten older, I’m a little more risk averse.
Wendy McConnell: Right. Yeah. And that makes sense. Yeah. Yeah. So you can play a little without risking a lot. Right, right. Great. Well thank you so much, Rick, for joining me today with a lovely conversation about market volatility.
Wendy McConnell: Everybody wants to talk about it. It’s, you know, the big thing going on right now, so we appreciate your input.
Rick Kennedy: Thank you very much, Wendy.
As we conclude our exploration into Rick Kennedy’s exceptional path, we are left inspired by his ability to carve out a unique niche for himself. From his early experiences as a patient to his commitment to providing a positive atmosphere for his own patients, Rick’s journey in dentistry is a testament to his passion for delivering exceptional care. Moreover, his insights on market volatility and investment strategies offer valuable lessons for individuals seeking to navigate uncertain financial landscapes. Rick’s balanced approach, influenced by his family’s real estate background, reminds us of the importance of diversification and thoughtful decision-making when it comes to investing. We extend our heartfelt thanks to Rick for sharing his expertise and experiences with us today. Join us again for future episodes where we explore more fascinating topics and hear from remarkable individuals like Rick Kennedy.
