00:00:00 Hosts Nate Crannell and Mike Neubauer discuss the ongoing debate around interest rates and inflation. Mike initially believed that rates would be coming down, but with recent economic changes, he now thinks they may stay the same or even climb. He attributes this shift to the persistent inflation rate of around 3%, which he doesn't see dropping significantly without a major economic issue. The upcoming presidential election could potentially influence interest rates, but for now, Mike thinks the economy is running its course outside of that factor. They also discuss how the Covid-19 pandemic caused inflation through supply chain disruptions and the resulting shift to used cars and onshoring of manufacturing to North America, which keeps inflation relatively high due to the costs associated with these changes.

00:05:00 Mike & Nate discuss the current economic climate and the debate surrounding inflation and interest rates. They mention how the reshoring of manufacturing and the struggling Chinese economy may lead to inflation, but some believe interest rates will drop soon. The speakers share their perspectives, with one having seen signs of a potential recession but now observing stabilization, while the other argues that the Federal Reserve (FED) may be dropping rates to speed up the recovery process following crises in the past. However, the FED has already implemented such measures during the COVID-19 pandemic, and the economy has shown signs of stabilization. The speakers also touch upon the demographics that may lean towards the belief that interest rates will drop, primarily high-income earners looking to borrow and invest. Overall, the speakers discuss the complexities of predicting economic trends and the role of the FED in shaping the economy.

00:10:00 Mike discusses the emotional impact of inflation and rising interest rates on individuals and their consumption habits. He explains that people's perception of normal interest rates changes over time, and the current high rates may take some time to become accepted as the new normal. The speaker also mentions the significant national debt and the potential consequences of high interest rates on it. However, he notes that the US economy is doing relatively well compared to other countries, and the strengthening dollar may force other countries to lower their rates to boost their economies. Overall, the speaker suggests that the belief that interest rates will eventually come down is based on historical precedent and the assumption that the current economic situation cannot last forever.

00:15:00 The speakers discuss the potential for economic growth in the United States despite a high debt load, and the impact of AI on efficiency and cost. They suggest that a 5% interest rate may be normal given the growth potential and the efficiency gains brought by AI. However, there are also concerns about red flags in the economy, such as commercial real estate debt and potential inflation. Some experts believe that interest rates may not come down significantly in the next two to five years, while others anticipate that they could drop if certain economic conditions are met. For healthcare leaders and professionals, staying informed about interest rates and economic trends is crucial for making wise financial decisions.

00:20:00 In this section, the speakers discuss the mindset physicians should have when considering borrowing money for investments or starting a business, given the current low interest rates and potential inflation. The speakers suggest that physicians should consider starting as soon as possible to take advantage of the current rates and the potential for refinancing if rates decrease in the future. They also advise against borrowing for liabilities and encourage wise investment decisions. The speakers emphasize the importance of not missing out on opportunities due to fear of interest rates and the potential regret of not starting when the opportunity presents itself.

00:25:00 Mike & Nate discuss the challenges of securing commercial real estate loans for those looking to start a private practice. Rates are around 7%, but banks are more risk-averse and less likely to lend to new practitioners. To reduce risk, banks prefer applicants with experience in running a business or a proven track record in their profession. For those without such experience, they may need to come up with more capital, bring on a partner, or explore SBA loan options. The speakers also suggest reaching out to experienced private practitioners for guidance and partnership opportunities. Overall, starting a private practice during a time of economic uncertainty can be challenging, but it may also present opportunities for those who are willing to push through the obstacles.

00:30:00 The speakers discuss the challenges and obstacles faced when borrowing money and starting a business, specifically in private practice. They emphasize the importance of finding experienced mentors and learning from their experiences to navigate potential obstacles. The speakers also touch on the economic shift as the Baby Boomer generation retires and repositions their capital, creating opportunities for millennials to invest in private businesses and real estate. However, they caution against the stock market due to the potential for significant capital outflows as Baby Boomers move their funds into retirement accounts and safer investments.

00:35:00 Mike discusses the potential effects of the boomer generation withdrawing their funds from the stock market and shifting to savings accounts, causing a paradigm shift in wealth building. The speaker suggests that this demographic change could lead to a decrease in the stock market's importance and the rise of alternative investments. Additionally, higher interest rates for younger generations may result in less money available for retirement savings, leading to an emotional response and potential adjustments to financial strategies. The speaker acknowledges that making logical decisions based on numbers and charts is ideal but emphasizes that people's financial choices are often emotionally driven. Ultimately, the speaker encourages paying attention to these trends and being prepared to adjust strategies as necessary.

00:40:00 Mike Neubauer discusses the opportunities for millennials in the context of American employment and infrastructure development, despite current economic uncertainties. He encourages young people to take action and start their own businesses, such as private practices, by learning from experienced professionals who are looking to retire. The speaker suggests reaching out to these individuals and working with them for a few years before purchasing their practice, creating a win-win situation for both parties. He also clarifies that securing a loan for the buyout should not present significant obstacles due to the existing business's financial track record and the newcomer's gained experience.

00:45:00 The speakers discuss the risks and strategies for new physicians joining an existing practice, particularly during the transition from an older doctor's retirement. The biggest risk for new physicians is losing patients, as there is no guarantee they will follow the new doctor. This risk can be mitigated by a smooth transition, allowing the new physician to build relationships with patients over several years. Private Equity firms also recognize this risk and typically keep the retiring physician on for a period to ensure a smooth transition and maintain patient retention. Older practice owners, or those approaching retirement, should consider factors beyond just the sale price when planning their exit. Taxes and understanding the tax code can significantly impact the amount of money they ultimately receive.

00:50:00 The speaker discusses the importance of personally operating a private business, such as a private practice, rather than selling it to private equity for a big payday. He compares selling a business to trading an apple tree that produces apples year after year for a basket of apples, half of which gets taken by taxes. The speaker advises keeping ownership and distribution instead of focusing solely on the value or cash out. He suggests seller financing and monthly payments instead of a lump sum payment. The speaker also emphasizes the importance of having a long-term plan and not just focusing on a big dollar amount, which could be gone in a few generations. He encourages listeners, especially physicians, to create a legacy plan or transition plan for their business, even if they are not yet ready to sell.

00:55:00 The speakers discuss the challenges private practice physicians face when considering selling their businesses due to lack of planning. They also touch upon the impact of interest rates on business investments and competition in the industry. The speakers express that higher interest rates make it more difficult for new entrants to invest and run businesses, giving an advantage to established players. Despite the frustration of paying interest payments, the speakers see it as an advantage in keeping competition low. The episode concludes with a promise to keep monitoring economic factors affecting their physician audience and plan for future episodes.