WCI #10: An interview with Mrs. WCI

This is the White Coat Investor podcast where we help those who wear the white coat get a fair shake on Wall Street. We've been helping doctors and other high income professionals stop doing dumb things with their money since 2011. Here's your host, Dr. Jim Dahli.

Welcome to the White Coat Investor podcast, episode number 10. Today we're going to have something very special. We're going to have our first guest that we've had on this podcast and our guest today is my wife, Katie.

I estimate that 80% of doctors need, want and should use a financial advisor and or an investment manager. Some investment gurus, such as Dr. William Bernstein, think my estimate is way too low. At any rate, if you want to use an advisor temporarily or for your entire life, there's no reason to feel guilty about it. Just make sure you are getting good advice at a fair price. If you need help updating your financial plan or just getting one in place, check out our list of recommended financial advisors@whitecoatinvestor.com financial advisors. You can do this and the White Coat Investor can help.

Welcome to the podcast, Katie.

Thanks for having me on.

All right, our first question is would you mind telling us about your upbringing, your education, and your professional pursuits?

So I grew up, I was the only girl and the second oldest of six kids in our family. My father was career military, meaning we moved every three to four years. The first with about 10 of my 18 childhood years were spent actually living in Japan with that experience. So I had traveling around a lot, had a lot of different exposure to different areas and countries and really enjoyed that time as well. As far as my education, once I had graduated from an American high school in Japan, came back and received a bachelor's degree in athletic training and worked for a couple years in a physical therapy clinic. But when they wanted to max out my pay at $10 an hour, I decided I needed to gain some more education in a different field. And so I decided to go back and get a teaching certificate which ended up turning into getting a master's in adapted physical education and also certifying to teach physical education. I taught for a few years before staying home with our children that joined our family to help raise them and take care of them. So I came from many generations of educators. So education had always been very important in our family and strongly encouraged and so really tried, you know, throughout schooling to always try to do well and to continue doing the best I could. And as I was looking for different options when I wanted to return to graduate school, one of the Things I decided to look into was physician assistant school. But with the situation we were in with Jim in medical school, I decided to just apply to the one in Utah, which heavily focused on time working in the medical field. And even though I had significant hours working as an athletic trainer, it didn't compare to the nurses and EMTs that had worked for years and that was more highly weighted versus high gpa. And so that opportunity didn't pan out. And you know, I also made the sacrifice wanting to for our family instead of. I could have applied to PA schools all across the country and gone elsewhere, but at the time didn't feel that was right for where we were with things.

Tell us for a minute about your early experiences with money and how they affected your later financial outlook and decision making.

As a child. My parents always gave us some allowance money, but particularly that really hit home when we became high school age. And we were given a set amount each month that would to cover any school lunches, clothing, any expenses we had. And then we had to learn to budget that within those parameters. And so it was a good period of time to practice using a budget within with a safety net of parents. They also encouraged us to work during high school and particularly in the summers as we could, but not just to go work a fast food job, but something that required some training. And so myself and many of my brothers ended up training and becoming lifeguards and swim instructors, which was actually a better job because one, it paid well and two, you had downtime to do homework if you were working after school in the afternoons while you were still on the job. So it was really beneficial and it gave us some more money as far as savings that we could use towards our education in college when that time came. And I think that really helped to make some of those decisions early in life before the decisions became a lot bigger and with increased risk and outcomes that could come from that.

So who's the bigger cheapskate, you or your husband?

It all depends on what you're talking about. When it comes to house improvements, it's definitely him. If it comes to outdoor gear, it's definitely me.

That's the truth. She's been searching around for skis on the classified ads for the last few weeks, but she did eventually get a pretty sweet set of skis for a very good price. Over the last few years, you've become quite wealthy. What are your thoughts about being wealthy? Does any of it feel undeserved to you?

You know, when you talk about wealth, I think as a Child, you always thought the wealthy were those with the butler and the fancy cars and the huge estate. And as I've gotten older, realizing that's not really the case, and somebody can have all of that but not be wealthy because they're spending every penny they have. And yet those that are wealthy tend to live very modest lifestyles. And so my idea of wealth, what wealthy is, has probably changed quite a bit. So in a sense, I don't necessarily feel wealthy because I don't have that kind of lifestyle. But our needs are met, we can fulfill most of our wants, and so we have a good life, and that's the important thing. Wealth is more than just money. And so it's important to look at and be content with what you have as far as it feeling undeserved. I definitely feel like we've been blessed to have different opportunities that have led to our financial success, but we've also worked to put ourselves in a position for some of those things to happen.

What do you attribute your financial success to? Obviously, your high household income helped, but there are plenty of physician couples out there with an income just as high or higher who haven't seen anywhere near as much financial success as you have. What is different about you?

I think a lot of that comes from my upbringing. I had grandparents that were educators that worked really hard and they saved a lot, and they were great example of what the good life can look like. And in retirement they had many great things, but they saved a lot of money and it paid off in the long run. As Jim and I were first dating and then decided to get married, we talked about what we wanted our future to look like, and we set some goals and some priorities of things we want to work towards. And so that's helped us along the way in the decisions we have made. A lot of the things I think that help is just being content with what you have and where you're at in life and not always wishing for what the person next to you may have or the life that they're living. And so I think those things have all really helped.

I hear you mention this theme of contentment. Do you think being content is one of the keys to feeling wealthy?

Certainly, because a lot of it is your thought process. And so you're going to believe what you're telling yourself. And if you're not content with where you're at and you're always wishing for something, something more, you're not going to be happy. And so just being happy with where you're at right now with things, that's.

An important point, that it's not really a level of money at which you have. It's a level of money which you have in comparison to your wants. And the fewer wants you have, the wealthier you are on any given level of income or assets. On a different note, what do you think about your monthly budget meetings?

Definitely. They're not never exciting and I. It's brought up. It's not really what I want to necessarily be doing, but I know that they're important to make sure we're on the same page and to check in with how we're doing with our spending and expenses. Because even some months when I feel like we've been relatively frugal and then you're surprised when you look at the end of the month bills as to how much was actually spent on different things. So it's a good reminder each month to be cognizant on expenses and sort of provide that monthly check to your spending.

With regard to your spending, what would you prefer to spend more money on?

I think right now the things I think about that I'd like to spend money on or save money for is travel and doing some home improvements.

What would you like to see less money spent on?

That's a good question. That's a hard question. You know, one thing. When we bought this new fancy boat, I was content with the boat we had. I'm not going to say I don't enjoy the new boat, but it was a lot of money and it's a lot of money to maintain. But. But we have a lot of great family experiences out on the boat, so it's hard to say. I feel like we have most of our expenses pretty well in check.

Let's talk about investments for a minute. Do you feel like you could take over the investment management of your husband keeled over tomorrow? Would you hire a financial advisor? If not, how is it that you learned how to do all of that?

Yes, I think I could manage as I'm aware of what investments we have. For the most part, Jim's really good about, you know, talking about the different things and why we have them. And, you know, I have input and as we're talking about changing our investment plan and so that helps. I feel like I'm not in the dark about where things are and those kinds of things. If he were to keel over, there's a chance maybe I would hire a fee base for a couple hours if I had some questions about things. But I think I'm pretty aware of what we have and what needs to be managed. And partly because I try to read the posts on the blog and I've read a couple finance books, so I feel like I have a good basic knowledge set that would help with that.

Now you say fee based. I assume you mean fee only.

Yeah, fee only. Pay them an hourly rate.

We've already made that mistake. We hired a fee based advisor and that's actually what led to the creation of the white coat investor. You've never bought life insurance on yourself. Do you think that was a mistake? Would you do it differently? In retrospect, when do you expect you'll feel comfortable canceling the life and disability insurance on your husband?

We never bought it on myself, but in retrospect I may have. It would have been a good idea to have bought some early on if something were to happen. I've seen situations where young mothers have passed away and it's been a big financial burden on the family. And so it might have been wise to have, you know, 10, 20, $30,000 to help with funeral expenses and whatnot. Luckily we're in a position if something like that had happened, I think our extended family would have been able to help out in that kind of situation with some of those. But there's sometimes you don't think about the other expenses of childcare or food preparation or things that would be. Would really add to your spouse's burden if your spouse were to pass away. And so those are things to think about as to whether or not to have life insurance at this point. It's not needed. We have the funds, if anything were to happen, to cover any of those costs and issues. As far as canceling Jim's life and disability insurance, I think we're getting close to that. And in a few years it feels like you've put a lot of money into that and maybe hold out to see if you actually got a payout from it. But it is a lot of money each month and as we get closer to complete financial independence, I don't think that the need for that has become much less.

All right. In the last year or two, you've taken on a much larger role at wci, arranging speaking gigs and managing book sales. What have you enjoyed about that the most and how has your attitude toward wci, the business, not the person, changed in the last year as you have worked with it?

You know, I have enjoyed being more involved in the business and I apologize if I haven't always responded right away as it is a very part time kind of thing is juggling everything with our family and our household. But it's good to see the impact that WCI is having on the lives of many physicians. I certainly have more patience with the work and the time involved and I want to help grow the business to reach more docs and increase the knowledge that's out there now.

This is really becoming a family enterprise. Your daughter did her first post on WCI not too long ago. What do you think about your daughter's recent post?

First, thank you for all of your kind responses to her post. That's really made her day. She worked really hard and put a lot of time into writing that post and it's good to see her start to internalize so many of these lessons and start off on the right foot financially.

Yeah, it's been really been a fun thing. Aside from the fact that money paid to her for her work is basically tax free and then especially if it goes into a Roth ira, will never actually be taxed. But I think the biggest benefit of having her do that stuff is she's learning it and that's going to carry dividends throughout her life. Many WCI readers and podcast listeners are not physicians, but are spouses who don't work in medicine. What advice do you have for them about sharing life and finances with a doctor?

First, I think you have to have a lot of patience with the many demands on their time, the odd hours, the many stresses that they face with medicine as they go through the education process and then working and taking call and those kinds of things. I think also the not only having patience, but you have to be independent and being willing to sort of just go forth with plans, whether they can be there or because you never know when they might get called in for a case or not be available for whatever was originally planned and be okay with those kinds of things. And a lot of times also you have to be aware of people will tell you that you deserve X, Y or Z because you're married to a rich doctor and you need to not let that get to your head and instead think about what you really value and what's going to make you the most happy and spend your time and money doing those kinds of things and not what society tells you that you should have or you deserve because you've gone through this route of becoming being involved in the medical career field or with your spouse in the medicine.

Why do you think doctors and their spouses are in such a rush to buy a house? Do you regret any of your housing decisions in the Past, I think it.

Goes back to that same idea all of a sudden we've sacrificed for so long, we deserve this, this big house, this Dr. House that everybody tells us we can have because we now have a high income. But it's best not to rush into it and to take your time. You never know when a job's not going to work out when you first get there. When we first moved out here to Utah after our time in the military, we rented for six months to make sure things were settled and looked like they were going in the right direction before we got tied down with the house. Because a lot of times it can take people many years once they, to get rid of a house if they have to move or something. And that can be a real financial burden. So take your time. Then you're not rushed in the decision. You can really know the housing market better. And yes, it's a hassle maybe to rent for, for a short period of time, but it will be worth it in the long run financially. As far as regretting housing decisions, I don't think, you know, there's probably a couple times we bought and shouldn't have bought and, but eventually it all sort of works out in the end. Did I love living in the small townhouse in a sketchy neighborhood when he was first a attending physician? Maybe not. But we had a plan and that was part of the plan as far as buying a smaller home and then selling it and buying the plan was probably to buy about three or four homes along the way, you know, increasing in size. But because we had really worked hard and saved a lot in that first home, we were able to buy our long term home coming out of that situation and so knowing the whys of why you're doing things and that can help the plan continue on and where you want it to go in the long run.

What can you tell listeners about your husband that they probably don't know and which won't embarrass him too badly?

Oh, that's a, that's a good question. There's so many stories I should put the kids on here and they'll tell all the embarrassing stories that they've heard from his siblings as him growing up. Because I'm sure we all have stories we would wish that never got out from our teenage years. But such is the case. Jim is one. He's the master of dishes in our home and cracks a whip after dinner when he is home for dinner time and helps to get the kids to do their part in helping out with that. So I really appreciate it. When we first were married, we always said whoever cooked the other one had to clean because we were both gone quite a bit with school and work. And he doesn't like to cook, so he is now the master of that category. Some of the other things Jim really likes to play computer games and sometimes I think his monkey balloon popping game on the computer is done under the guise of website work. But that is his downtime and you know, when he's not doing other things other than that, I don't know. He loves, loves outdoor stuff, but I think that's pretty obvious from many of the pictures and comments on the blog, so I think you see that side of him.

Thanks for being with us today. We hope you guys enjoyed that look into our finances and our relationship and our household and hope there's some lessons there that you can take and apply in your own situations.

I estimate that 80% of doctors need, want and should use a financial advisor and or an investment manager. Some investment gurus, such as Dr. William Bernstein, think my estimate is way too low. At any rate, if you want to use an advisor temporarily or for your entire life, there's no reason to feel guilty about it. Just make sure you are getting good advice at a fair price. If you need help updating your financial plan or just getting one in place, check out our list of recommended financial advisors@whitecoatinvestor.com financial advisors. You can do this and the White coat investor can help.

Thanks for listening today. See you next time.