WCI #262: Kids (and Engagement Rings) Are Expensive! And What Is the Future of 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.

This is White Coat Investor podcast number 262, cost of raising a Child, Questions on homes, rings and Robo advisors. 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. See, we're recording this. It's March 28th. This actually isn't going to run until May 12th. You know what that means when there's six weeks between the time of recording and the time it's going to run? It means I'm about to go have a whole bunch of fun. But today we are together. I am here with Dr. Thisia Spath, my co host here on the White Coat Investor Podcast and we have got a great episode planned for you today. What have you been up to lately, Tisha?

Oh, gosh, you know, just the usual kids and work and nothing too special recently. How about you?

Well, I'm actually recording this between two trips. I'm in town for, let's see, 28 hours between a trip to Phoenix and trip to Costa Rica and I've got a shift in that time period. So I've got a whole bunch of work this morning and packing bags in between the work. And so it's a pretty quick turnaround. But we're going to get this recorded. Cindy tells me we have to record this episode today because I'm apparently going to be out of town three or four weeks in April and she's going to be out of town the other week. So here we are recording six weeks in advance. So if anything in this episode seems really out of touch with what's going on in the world, don't blame us. It's, you know, recorded quite a bit in advance.

It's because Jim's a rock star.

Well, I don't know if I'm a rock star, but, you know, I mean, the pandemic's not over. I guess it may never be over. It depends on how you define over. But we're definitely traveling again, and we kind of take this perspective that since we're financially independent, we don't want to miss out on anything. We still like work, but we don't want to miss out on anything. And so we're kind of trying to live this hybrid life where we go on all these trips and do whatever we want to do, but also have meaningful work. And it ends up getting really busy sometimes. And I don't know, maybe we'll figure that out one of these days. But so far we have not yet.

Yeah, there's definitely, like a whole bunch of rebound travel that's happening.

Yeah, for sure. There's a lot of rebound travel out there. All right. I got to tell you about something I've been working on. I'm actually done with it at this point that we're recording this, but it hasn't launched yet. By the time you hear this episode, we'll be launched. And it's called the White Coat Investors Guide to Asset Protection. This is a book I've written over the winter. It's all about asset protection. A single subject. Right. We're all out there worried we're going to get our pants sued off us from making one mistake at work and losing everything we've ever earned, everything we have that our whole life we're going to be destitute because of one malpractice suit. And that fear is not. Is probably completely overwrought for most of us. But the chances are not zero of that happening. And so the book goes into both what I call basic and more advanced asset protection strategies. But perhaps the most important part of the book is it details all of the relevant asset protection laws. And this was a big deal, compiling all these, because asset protection law is state specific. Every state has its own asset protection laws, whether they protect IRAs, whether there is a homestead exemption, whether they protect whole life insurance, you know, whether. What has to be done when they sue you. All these laws are unique and state by state. And so without knowing your state's laws, you can't really come up with any sort of a reasonable asset protection plan. So a big chunk of the book, more than a third of the book, is just a listing of the state asset protection laws. And you can use that to look up your own state, state of anywhere you do business, states you're considering moving to after your training, et cetera. And so it's going to be a pretty Useful book to have on your bookshelf, not just to read once, but to actually have as a reference. So check that out. It's available at Amazon. Like usual. You go to whitecoatinvestor.com assetprotectionbook and it'll take you right there. But I hope you enjoy that. It represents a lot of work and the staff's done a great job doing the layout. Emily primarily is our staff member who's worked on that as well as getting it uploaded onto Amazon. So thank you, Emily, for that help. Check out, check out the book if.

You are interested, Jim, I can't wait to read it.

Yeah, it's going to be good. We'll get a copy out to you. And if you are, you know, you got a big audience, you got some huge Facebook group, or you're a blogger or you're a podcast, or you don't have a copy yet, shoot us an email, we'll send you a copy, tell your audience about it. We'd be super grateful. That would be awesome. All right, let's talk about childcare. Why don't we kick this off, why don't we kick this off with a question off the speak pipe? We got a great question from Megan. Let's listen to her question and then we're going to rant a little bit about the costs of raising children because they are not insignificant. All right, let's take a listen to this one. Hi, Jim. I'm a general surgeon and my husband is a vascular surgeon. So for obvious reasons, we have to have a full time nanny. Currently, we use a company that takes care of W2, paying employer taxes, deducting the nanny's taxes, and actually paying the nanny. However, they're upping their fees to over $1,000 this year. Is this something that you think that we could do on our own or do you have any resources for setting up a payroll? We will be doing this for many years, so these costs can add up. That's a great question, Megan. Thanks for leaving that. There are a lot of costs of having children, not least of which is child care and the cost of complying with the tax requirements of childcare. Let me first tell you what not to do. Then Fisha can tell you what to do. What you should not do is what happened to my daughter this last summer she was hired as a nanny and took care of, you know, a few kids for a local family for most of the summer. She made several thousand dollars. And then, you know, we start talking about taxes last month and I asked her how much she made? She doesn't know how much she made. Did she get any tax forms from the employer? No, no tax forms from the employer. Basically, they were treating her like she was the Friday night babysitter. Well, that works fine for the Friday night babysitter. It does not work fine for your full time nanny. The IRS draws a line at $2,300 a year. If you are paying a household employee, which is what a nanny is, more than $2,300 in the year, you got to treat them like a real employee. Right? You got to do i9s, you got to do W2s, W3s, W4s, you got to send them tax forms. Because what happens is when they go to file their taxes, they're faced with the dilemma that my daughter has right now. The dilemma is, do I not report this income or do I do what the IRS wants me to do, which is report the income, say I didn't get a W2 I should have gotten and throw you under the bus for not paying applicable payroll taxes. So don't put your nanny in that sort of a situation. Don't put any sort of household employee in that situation. Actually comply with the laws and do what you're supposed to do and keep everybody out of trouble. Tisha, you want to talk to them a little bit about what they're supposed to do and some of the easy ways to do it?

Absolutely. Yeah. So nannies are considered household employees, which is not independent contractors. So because you are basically employing this person for most of their time, you're now an employer. And as an employer, you must pay the Social Security, Medicare and federal and state unemployment taxes on the wages paid to that employee. And also remember that each state has their own rules, so there might be some state level taxes. So if you're going to do this yourself, there are a few services that will help you with it. With it. Nanny checks does it for $6 for a weekly paycheck. They charge $6.25 plus $80 quote quarter for quarterly filings and $150 at the end of the year. So basically that comes out to about $66 a month. Care.com does it for about $75 a month. We had a guest post by Dr. Astrid Moisey on the White Coat Investor called Financial costs of childcare. And if you want the details on that, she's got her all laid out for you. So basically you're going to be needing to pay all these taxes upfront and then like Jim said, providing them with Tax forms at the end of the year as well. So that's one way to do it. Nannychecksracare.com sounds like a good option. Of course, you could also consider maybe hiring an au pair. A lot of physician families with dual physicians, two physicians have good luck with au pairs because they're available to you at all times. You know, with changing schedules, with changing calls. Sometimes nanny schedules don't work out. But an au pair is basically you sponsor someone to come live with you in your house for a year. And usually you are also required to provide them with car and accommodations. So if you have an extra room in your house and you can get someone to come live with you, that would obviously be ideal and actually turns out to be pretty cost effective as well. The annual cost of having it au pair is about $19,000, plus the car and the accommodations. And there are different companies out there that will do that for you. So that might be a good option for you. And of course, there's center based and daycares and in home daycares, which are a little bit more expensive.

Yeah, I think most people are probably going to center based child care, but that doesn't work very well for doctors. Right. When you get called into the hospital or you're working night shifts or evening shifts or weekend shifts, a lot of these places are closed. They're like eight to five operations Monday through Friday. This was a huge issue. I remember for one of my residency classmates. Right. She was an ICU nurse. I think she worked nights. He was an emergency medicine resident. No center based daycare was going to work for them. And so they actually ended up paying my wife to watch their kid. And it was good. She was about the age of Whitney, and so they hung out together, they were good friends. But that was the only sort of a thing that would work for them. They could not have done anything that was, you know, standard for standard employees who work banker's hours.

Right? Yeah, we're just so we're lucky because my husband works from home and then we moved close to his family so they could help out when there's like, you know, one of us has to work or we both have to work work, and that the daycare is closed because of COVID you know, and all this stuff. And it definitely. Childcare hours and center based hours really restrict a lot of parents and make it quite impossible for dual physician couples. So, yeah, you know, nannies or au pairs would probably be a great option for those kind of dual physician families.

Now the government knows this is expensive stuff. I mean, imagine you're the average household making 55,000 or $60,000 a year and you're looking at costs of 20,000, 30,000, 33,000. You know, to watch your kids. That doesn't work very well. So the government has done a few things to kind of help with the cost. You want to talk a little bit about some of those tax breaks that come for childcare?

Yes. There's two different options and they've recently been really beefed up because of COVID which is really awesome for families. So the first option you have is a dependent care fsa. Of course, that's not guarantee, generally that's employer sponsored. So if your employer has this option, this is a really good option for higher income families. The other option is child tax credit. The child tax credit was actually paid out in increments during COVID So the important thing to remember about that is the child tax credit is something that you opt into, but you can't use the dependent care FSA money for the same stuff that you're getting the child tax credit for. So you can't use both of them for the same amount of dollar expense. But thankfully we all have so much, so much child care expense most of the time that we can utilize anything that we get. The dependent care FSA basically lets you use pre tax income and bypass Social Security and Medicare tax and pay for child expenses with your pre tax income. So it decreases your taxable income, which is awesome. And because of COVID the American rescue plan actually increased the contribution that you can put into a dependent care FSA from a $5,000 max per year to $10,500 per year. And they actually made it so that it could roll over. Whereas before in a dependent care FSA it was either use it or lose it kind of situation. Because of COVID Covid, you can roll over those funds. You can get almost get $15,500 pre tax for child care this year. And the child tax credit, which used to be a pretty bad deal for high earners because it maxed out at 20%. So it's phase, it's phased out because of AGI, your adjusted gross income. So the higher your adjusted gross income, the less child tax credit you get. But because of the American rescue plan, it has increased the benefit from about $1,000 to you to up to $4,000 per child for one child and $8,000 for two or more children. So these are really important tax benefits to be aware of if you do have kids and make sure you do utilize it. The important thing to know about a dependent care FSA is that you can have it even if you have an hsa. A lot of times you don't. You can't have HSA medical and a medical fsa, but you can have a medical HSA and a dependent care FSA together.

Yeah, that child tax credit was a bit of a change. I mean, it used to be almost no docs qualified for it. Now many docs qualify for it. The phase out starts for a head of household, which if you're single parent, you're probably filing head of household starts phasing out at 112,500 of income. All right, so most docs are going to be above that, but if you are married, it starts at 150,000. Married filing jointly starts at 150,000, but goes all the way to 400,000 before, before you're completely phased out of it. So lots of docs can get their AGI below 400,000. Probably the majority of docs, I think the average physician income, not the average physician household, but the average physician income is 275 right now. So lots of docs are going to be under that $400,000 limit and be able to get some sort of a child tax credit, which, you know, I know how much kids cost and the tax credit doesn't come anywhere close to paying for them, but it helps. Every little bit helps. And so if you qualify for that, make sure you're getting that when you file your taxes. But mostly it just costs a lot to pay for kids, you know, and the funny thing is everyone thinks, oh, it's crazy paying for childcare. I can't believe how expensive childcare is. Well, guess what? It doesn't get any better. They just keep becoming more and more expensive as time goes on. You know, all of a sudden now you're paying for private school or you're paying for college, or you're getting them a car or, you know, they start eating more. Have you ever fed, you know, teenage boys? They're not exactly, you know, skimpy on their portions. You know, this, this expense doesn't really go away until they're out of college, to be honest with you. So get used to it, I guess. Kids are expensive.

Yeah. I feel like it just shifts.

Yeah, exactly.

At least with the, the daycare expenses, it is somewhat subsidized by the government with these tax benefits. So you might as well use them while you can.

Yeah. Let's go on to our next question on the Speak pipe here. This one is about engagement rings and we had a good time discussing this, but let's take a listen to the question. Hey, Dr. Dali, this is a pretty non traditional question, but I'm currently a resident and I'm thinking about proposing to my girlfriend at some point. And I was wondering, how much should someone in my position spend on a ring? Now, tradition says that we should spend approximately three months of one's income on a. On an engagement ring. And as a resident, I rake in, let's say, $60,000 a year. So three months of that would be $15,000. That's a lot of money, especially for someone on a resident salary. Now, obviously, I want to invest in the person I love. I want to get something that both she and us are, you know, proud of together. So I'm just curious, like, do you have any guidance as to how much one in a residence position should spend on a ring? And also, is a ring really even considered a financial investment? Obviously it's something that is an investment into our future together, but since it is a financial podcast, is it something that we should consider as a financial investment as well, since we're. I would be potentially contributing a lot of money towards it. Thanks. All right, great question. You want to answer this one first, Disha?

Yeah, I would definitely. If I were buying a ring for someone, I would start with what they wanted rather than the dollar amount. I would take them to the store, kind of get an idea of what they actually want. It's like, funny story, my husband bought me this awesome rock right here. Several rocks. And he actually sold his motorcycle to do it. I mean, what a wonderful gesture. The fact that he lives longer because he's not on a motorcycle anymore and. And he gives me a ring. But you know, honestly, when I saw it, I was like, oh, not my favorite ring. But that's okay because I love him and I'm going to accept it no matter what. But I would have, you know, I generally would have preferred like really super duper simple ring, not that expensive ring. Because honestly, all these, like, crevices in the ring make me nervous that there's bacteria in there that I'm carrying around from patient to patient. You know, I'm pretty, I'm pretty cognizant of, you know, all the germs, especially these days. So I'm trying to, like wash this thing in peroxide, you know, several times a month. But it really stresses me out, honestly, to be wearing this much money and this much bacteria potential on my hand. So I Tend not to wear it. So I would, I just wear my, my wedding ring. But yes, I would talk to your, to your potential spouse, your person and you know, just take them to a store and you know what girls kind of like a heads up. Anyway, that's what, that's what I would recommend.

You know, you say three months salary. I've never heard that before. It used to be 2 months salary. I don't know when that changed. But that's a guideline. And keep in mind who that comes from. Right. This isn't coming from some sort of sensible place. This is coming from the diamond industry. Right. From the jewelers. That's who comes up with this stuff. Right. This is not some sort of required purchase. You do not have to buy this. And it's not an investment in the purchase person. It's not. I'm investing in this for some sort of return down the road. That's not the way it works. You know, it's a, it's a sign of commitment, it's a sign of love, but it's, but it's not some sort of investment. You should expect a monetary return on that. If you spend $30,000 on a ring, you're somehow going to have a better marriage than if you spend $5,000 on a ring. That's just not the way it works.

Yeah.

So let's not think of this as an investment to start with.

I totally agree. An investment is something that brings you cash into your pocket and you know, either now or later. But this is not going to do that. If the person likes you, they're going to marry you. Right. It doesn't matter what kind of ring they get, you give them. But it would be great. I'm sure that if they had some sort of a clue as to what they were going to be wearing on their hand for the rest of their life. So, you know, I think, yeah, let's definitely separate investment from cost. This is definitely an expense. That's okay. It's a great expense to have just be cognizant of your budget and make sure you know what they want.

Yeah, for sure. I mean, it's like anything. Lots of people borrow tons of money to have a wedding. I think that's a terrible way to start out a marriage with all kinds of debt hanging over your head. That's the same thing. Lots of people borrow money to buy a ring. I think that's a terrible idea to have a bunch of debt hanging over an engagement, you know, so I would say a lot of it Depends on how much cash you have. You know, if you got all kinds of cash, you're this attending physician with all your ducks in a row, you can spend all kinds of money on a ring. If you were in the situation I was in when we got married, you probably shouldn't spend that much, right? I mean, I was just, I wasn't even graduated yet from college. You know, here I am donating plasma for grocery money, right? No, I'm not going to go spend $15,000 on a ring. You know, I think what I spent was probably 2,500. Now granted, it's been over two decades, so you got to apply some sort of inflation figure to that. It was a nice ring at the time, but it wasn't some huge rock that you would expect somebody to have, you know, that was marrying a doctor, for instance. But I did what this just suggested, right? This was not a surprise when I asked my wife to marry me, right? I mean, maybe how I did it was a surprise. It ended up being on the ice between periods of a college hockey game. But that's a story for another day. But the fact that the question was coming was no surprise. We've been talking about marriage for months, right? We've been talking about everything you can imagine about marriage to try to be prepared for it. And so it wasn't a surprise that the question was coming. And so she went with me when we went to the store, right? And she got to pick out what she liked and you know, still has it today. And you know, up until the time she sprained that finger and can't actually get it over her knuckles, she wore it all the time. But that's, that's kind of the way that, that wedding rings go. And so try to inject some common sense into the situation. You don't necessarily want to cheap out on something like this, right? I mean, typically this is something that gets shown off to friends and it's an important thing. So you don't want to have some terrible ring, but at the same time use some logic in the situation. It's interesting, these days I keep hearing these advertisements on the radio of trying to decide whether to use a mined diamond, which may have some ethical implications, apparently, because people don't treat diamond mined workers very well in some parts of the world versus, I guess they're growing them now in labs. And so I'm not sure which one's considered more valuable. I suspect the lab grown one is cheaper and maybe even prettier, but not as authentic. So you've got that dilemma to sort out at the jewelers too. But maybe that's a place you can save a few bucks and have a better looking ring anyway. I don't know. That's about all the advice I've got for you on that subject. 15 grand seems like a lot for a resident to spend on a ring though.

I'll be honest, that's crazy. I think most people spend about 3,000 if you're looking for like a number. But funny story, actually. Josh and I are going to go and go shop for a simpler ring for me this year because it's our tenure, so very cool.

So there's always, you know, there's always the opportunity to upgrade this thing. I don't know what they call it, an anniversary ring or something. You can always get a nicer ring later. So don't feel like this only has to be a one time purchase. Keep it reasonable. You know, I don't know that I'd say 3,000. That feels like maybe not all that much these days, but I'd say less than 10 if you're a resident. Anyway. Seems like a lot to spend more than that to me. But good luck with your decision. It's your money and I would try to buy it with cash. You know, just the act of saving up for it or selling your motorcycle or something to get it I think reflects significant commitment to the marriage and to your partner. And so I like that idea. All right, let's do our quote of the day. I love this quote. This one's from Henry David Thoreau. He said wealth is the ability to fully experience life. And I think there's a lot of truth to that when you can really not have to miss out on any opportunities because you have the money to pay for them. All right, let's take another question, this one from Randall. Hi, Dr. Dali, quick question I think you might enjoy answering. What do you see as the future of wci? I know you've talked about having other speakers and other members joining your team as part of a way to keep it alive and make sure it doesn't die with you. But I'm also curious what other changes you envision might come to WCI in next few years, next few decades, and when you think you might start cutting back and what your role will be going forward. All right. The future of wci. Yeah, I'll tell you what I've been telling people for the last decade. I don't know. I don't exactly know where it's going to go. I'm just along for the ride. And I couldn't have predicted where it is today, five years ago. I couldn't have predicted where it was five years in from the beginning. And who knows where it's going to be five years from now. Obviously, there's a lot more people depending on it now, though, so we do need some longer projections and some longer plans and things to do. The biggest risk to the white coat investor as a business is me. I'm the one most likely to screw it up. Something happening to me would be a significant issue, although much less significant now than it would have been a year or two ago. We're trying to make it so that it's a little bit more viable as business in that it doesn't depend just on me. It wasn't that many years ago when I was, you know, the CEO, the chief technology officer, you know, in charge of everything, basically. And then we started hiring people. It gradually took over some of the things I was doing and then started doing some things that I wasn't even doing. And so that's when it's really grown by leaps and bounds. What do we hope to do with it? Well, I mean, the mission statement is what we believe in. We truly want to help you get a fair shake on Wall Street. We want to help as many doctors become financially literate as we can. And the longer we can do that for, the more good we're going to do, not only for those doctors and their families and their descendants, but for their patients. Because we believe the doctors that have their financial ducks in a row are better doctors. We think that you can concentrate on your patients more, that you're less likely to do something maybe you shouldn't due to a financial conflict of interest. And so we want to keep that going for years and years and decades and who knows, centuries maybe, who knows? And so that's our first mission. Our second one is to connect you to the good guys in the industry. And the good news is connecting you to them. We can usually make some money, and so that makes it a viable business and allows us to pay people. But the main focus for the last couple of years, as you've noticed, and the next few years is going to be a process that involves removing me from the business, not because I necessarily want to be out of the business, but because the business is better without me. And by that I mean it's more of a business that can relate to more people. And it's a business that can endure when I'm gone or should something happen to me. But just setting it up that way is good for the audience, it's good for the business, et cetera. And no, I'm not planning on going anywhere. I'm planning on doing this for a long time. But we want to be prepared for those sorts of things. As you may have noticed, my hobbies are not exactly the safest hobbies on the planet. And something could happen at any given moment, and so we want to be prepared for that.

Oh, Jim, don't be a Debbie Downer. We miss you so much. Well, you know, we don't miss you.

It's true, you know, the founder, especially if something like this is going to be a big part of it, you know, but it's really a big question, can a business like this that was founded as Jim's blog outlive Jim? And we don't really know. You know, there's a certain percentage of you that are. That are here listening, that are reading the blog because you're personally connected to me, and we understand that. I don't know what percentage of the audience that is, whether that's 10% or a third or 90%, we don't really know. But there's a certain number who are coming here to become financially educated. And it's not that important that it's me behind the microphone or me behind the computer screen. And so obviously removing me from the business. The latter people don't care all that much. The former care very much because they're just here to listen to me. And so we don't really know what that percentage is, but we're certainly going to find out, because as people can tell, I'm not the only voice on this podcast. And chances are, you won't be the last voice on this podcast either. Thesha and same thing on the blog. People have noticed we have a bunch of columnists and contributors.

You mean you're not handing the empire to me?

I know, I know, it's weird. It's weird, isn't it? But the idea is to have multiple voices on here and have multiple perspectives and to make it sustainable because we think it does some really good things and we wanted to do that long term. So hope that answers your question of what we see long term for the white coat investor, more shorter term. We've got some books planned, some courses planned. We're going to keep doing the conference and it gets better every year. And we're continually making changes to the website and our communities to serve you better. That's where we're focused and we Got a lot of people working hard on it now. So it's a pretty fun mission and pretty fun business to be part of it.

You know, what I found is it's a learning process, being an entrepreneur and growing a company, but it's a lot of work and it takes a whole team. There are a lot of people behind the scenes, this podcast and the whole site. But what I found with the Frugal position was that I just wasn't willing to try to keep building that when there was already a platform that was reaching so many people here at the White Coat Investor. I thought the benefit to the community at large would be so much greater if we just joined forces and did this together. So that's why I'm here. And I really hope that this company, this business that provides a really valuable service to our community of doctors continues to keep going for years and years beyond us.

Yeah. Some people ask, why a business? Why not a volunteer kind of organization or some sort of nonprofit or whatever? And the truth is, I don't think we could do as much good if we weren't a business. You know, it's the profit we make that allows us to hire people, that allows us to, again, reach more people, that allows us to connect you with, you know, the good guys in the industry. So we think the business, a business is the right format for this sort of an effort. But that doesn't mean that, you know, money first is our mantra around here. It certainly is not. Do we make money? Yes. Do we want to take care of our employees and make payroll? Absolutely. But. But that's not necessarily the first and primary goal for the business. It does help me stay motivated sometimes when I'm not as motivated by the primary mission. So sometimes I'm more motivated by money, sometimes I'm more motivated by the mission. And I think it's good to have both those motivations working, working toward the success of this business. All right, enough about wci. Let's talk about you. This podcast is not supposed to be about me. It's not supposed to be about wci. It's supposed to be about you and your dilemmas and your struggles with money. So let's talk about the benefit of the first time home buyer savings accounts. This is a question from Jalen, so let's take a listen. Hi, Dr. Dali, thank you for all that you do. My question is about the benefits of first time home buyer savings accounts that are being put into legislation in several states now, here in Mississippi, that would allow us to make state income tax Deductible contributions of up to $5,000 a year and any earnings the account generates also grow. State tax free contributions past $5,000 each year are not tax exempt. However, my wife is in the spring of her Ms. 2 year and our financial situation will allow us to start saving for a down payment on a home. The major caveat is the funds must be used here in the state of Mississippi. If her residency or attending position in the future put us into a different state, the funds we would have to withdraw would be subject to the 5% state income tax here in Mississippi plus an additional 10% penalty. Is this too risky to have state tax exempt savings for a few years or am I overlooking anything? Thanks again. Well, this is my first time hearing about these. Have you heard about these before? Theja I haven't.

Sounds like a good deal for someone who's going to be stable in one state.

Yeah, I mean, here's the deal, right? Doctors, as a general rule, do not spend a lot of time saving up a down payment. They either save it up very quickly, they already have the money, or they use a physician mortgage. Right. If you are saving for a down payment $5,000 at a time for many years, chances are very good you would have been better off financing more of the home and getting into it earlier. My guideline for buying a home has always been buy when your personal situation is stable and your professional situation is stable. If you don't see any reason why your housing situation needs to change in the next five plus years, I think you ought to buy a home. I don't necessarily think you have to have a down payment, a classic 20% down payment. And so, you know, I don't necessarily see this need for a huge long term, you know, savings plan to come up with that down payment. Now there's obviously exceptions to that. If you're starting to save for a down payment early in a long residency and you're not buying during residency, then okay, that can make sense to be saving for many years. Maybe if you're in the military and you're not planning to buy until you get out of the military many years from now, that would make sense to be kind of a long term savor in that direction. But I would almost rather see people just putting the money toward their retirement savings and then when they get closer to that date, maybe focus more on the home buying process. So that's part of it. And the other part is $5,000 a year, which is the limit on lots of these state specific plans. Doesn't move the needle a lot for a doctor home. You know, if you're buying a home in Mississippi that costs $80,000. Yeah, five grand goes a long way. But the doctors I talk to buying $80,000 homes.

Yeah.

Especially if you live somewhere that's not a low cost of living. I mean, the average home in Salt Lake, now we're not the Bay Area yet, but it's been going crazy the last few years. The average home here is $400,000. You know, five grand a year doesn't go very far toward $400,000 home. And especially when it's 800,000 by the time you actually buy it.

Yeah, these things are made for, not for doctors. These things are made for lower earning people that are, you know, the more average American earner. But yeah, with the amount, with the amount of uncertainty we have with match Day and everything, it doesn't sound like a really good plan for a doctor.

Yeah, I don't think there's anything wrong with using it. If you want to use it, go ahead. I'm looking through this Internet site. They've got them in Colorado, Iowa, Minnesota, Mississippi, Montana, Oregon and Virginia. Keep in mind there's other ways to save up. I think it'd be a terrible mistake to skip out on funding a Roth IRA in order to do this, for instance, because remember, you can take the contributions from a Roth IRA out and use them for this. So I would do a Roth IRA before I did this. This would be pretty far down my list of accounts to fund if I had a limited amount of money to put into something and if I didn't have a limited amount of money to put into something, I had lots of money that I was savings. Chances are I'm already in a home anyway and I don't need this thing. But for some people, it's not a bad idea. Go ahead and use it. But a lot of these have a cap. Like I look in Colorado's, Its cap is $50,000 total unless you put in 14,000 a year, but no more than 50,000. Iowa, there's no cap. It's 100,000 in Minnesota for a joint account. No limits in Mississippi or Montana. 50,000 in Oregon, 50,000 in Virginia if you're single. And some of these aren't even passed yet. Like in Louisiana and Massachusetts and New Jersey and Pennsylvania, these aren't even, they're not even passed. They're just being talked about in the state legislature. So something to keep in mind. The government's trying to help us people get into homes. And be home buyers, you know, and so it's not a bad thing, but I just don't see this as being super useful for the white coat investor community. Okay, another question about financing. This one comes from Abdul. Let's take a listen to this. Hi, Dr. Daly, thank you very much for all you do. I'm a physician in the Southeast, and I have been listening to your podcast and reading your book since I was a fellow in 2018. I have a question that I got different answers to when I need some guidance. I recently financed a house on a lake an hour from where I live as a second home. My family and I still want to use this house, but I also want to rent it out on Airbnb, and I'm planning to give it out to a rental company for management. My main concern is legal and tax protection. Some advised me to create an LLC to put the house under, but when I did that, the bank threatened to have me forfeit the loan, so I backed off. Now I'm not sure really what to do. Should I just rent it out and raise the insurance ceiling on it, or should I try to refinance it under the llc? You know, that would apply to any house I would buy in the future, I guess. Again, thank you very much for all you do. I'm looking forward to hearing from you. All right, good question. Lots to go into that question, right? It seems so simple sometimes, but there's actually a lot to discuss about your question. The first thing is the concept of mixing business and pleasure, right? Lots of people want to do this. They want to have something they can use sometimes, but somehow figure out a way for it to pay for itself, right? This is the dream, is to have the second property that pays for itself so you can go up there whenever you want. But the truth is, when we buy something for consumption reasons, we tend to look at it differently than when we buy something for investment reasons. When we're buying an investment, it's very much a cold, hard look at what the cash flow is. And I don't think when we buy a house, we look at it quite the same way, and that includes second houses. When you're looking at that lake house, you're like, oh, this would be so fun to sit out on the deck. And it's a beautiful view, and I like the neighbors. And none of that goes into buying a rental property. When you're doing that, it's all about, how much will this rent for? What will the expenses be? What will the purchase price be? What's the cap rate going to be. Let's evaluate this. Is it a good investment? And I think mixing those two, you get into trouble. You usually end up buying more for consumption reasons and just hoping it works out as a good investment. And I think it's much less likely to. So that's the first thing that pops to mind when I hear this question. What, what, what are you concerned about? About this scheme?

So yeah, I would echo what you just said is whenever you have a second home and you are trying to rent it out, you know, it's good to know that when you didn't buy it as an investment, it may help support some of the costs to have short term renters in there, but it's probably not going to be a cash flowing property for you. And as long as you're okay with that, that's fine. The other thing is that whenever you try to put in an investment property or any property into an llc, most mortgages have a due on sale clause. So you can't transfer the property into someone else's name or a business's name without having to pay the mortgage like you encountered. So that is something I haven't heard of it actually happening to a lot of people, but I guess it did happen to you and it is a possibility in any closing disclosure or any loan document that you come across on a mortgage. So then how do you protect yourself from liability in this kind of situation? Well, LLC is certainly one way to do it. The other way is just insurance. But then again remember that you, if you bought it as a homeowner, you're going to need special renters or landlords insurance if you're actually going to be renting this for a significant amount of time. So you're going to need to have a lot of liability coverage up to a million dollars usually and make sure that you have the right policy that's going to cover short term renters and also cover any kind of damage or harm that might come to the people that stay in your property. Just because it's on the water or you know it has some other desirable thing that also kind of makes it dangerous.

Yeah, for sure. Docks, boats, lakes, running water, all that stuff adds liability to the equation for sure. You often can have a mortgage on a property in an llc. You probably shouldn't do it behind the bank's back. But typically I think if you were willing to continue to sign for it, personally I think they're usually okay with it. The other option is a non recourse loan basically where the Loan's just to the llc. But you know what, the bank's going to want a higher interest rate for that. You know, not only do you pay a higher interest rate when something is an investment property versus something you're actually living in, but when you have no, the bank has no recourse on you personally, it's even going to be an even higher interest rate. And so it may be the bank balking at the fact that you got this sweet personal loan for an owner occupied house and now you basically want to turn it into an investment property and put it in an llc. I can't blame them for wanting to be paid more for covering that because it's more risk to them. And so I think that's obviously something to consider. And so you just got to talk to the bank, talk to other banks, say, what are the options? What if I sign for it personally? What if we just go with a non recourse loan refinance into that? What if I put some more money into it so now your loan to value is only 50% instead of 80%, then maybe there'll be a little bit more willing to work with you. And I totally agree with you about the insurance. You know, umbrella insurance is good, everybody should have umbrella insurance on all their properties. But you're running a business now too, you need business insurance. And that's not an insignificant amount of liability. Keep in mind too second homes, the number that most people come up with, the rule of thumb is if you're not going to spend three months a year there, it probably doesn't pencil out. You're probably better off renting that space when you go. Even if you're there for a month or two, you're probably better off renting it than you are buying it. And so keep that in mind when you're buying a ski condo, when you're buying a lake house, how much are you really going to use it? And I'm talking about beyond the first year because we all go up there all the time the first year. I'm talking about beyond that, how much are you really going to use it? And if the truth is you're going to use it two weeks a year, this thing is not going to pencil out well for you as a second home. You know, if it turns into this great investment property, that's one thing, but you ought to probably be looking at it as an investment property first in that situation. And then maybe you can use it a little bit. Be aware that you can't buy it in an IRA and use it. If this is owned by your ira, you cannot use it personally. So that's an important thing to keep in mind. The other issue I see when I hear this question is the whole how leveraged should your life be? Question, right? And most of us as docs, we come out of school, we owe a ton of student loans, we're trying to get into a practice, we're trying to get into a home, we've got tons of debt. Our ratio of debt to our actual assets might be 40 times, 40 times as much debt as we have assets. And if you talk to experts on debt, on using debt, on using leverage to go grow wealth, you will see they recommend a much lower ratio of debt to assets. In fact, the numbers I have seen are 15 to 35%. So if you got a million dollar house and you got a $500,000 rental property, and you got $500,000 in retirement accounts, and you got $500,0000 in other investments, that's $2.5 million in assets. They're suggesting how much debt you have on that is in the 350 to, you know, $800,000 range, not, you know, two and a half million dollars worth of debt when you've got, you know, a million dollars worth of assets. So that's a very different scenario. So I think before you go financing a bunch of second homes, especially that aren't actually a need for you, that you really look at how leveraged your overall life is and decide how much leverage you actually want in your life. Because that not only introduces risk to your life, right? Nobody ever went bankrupt without having a bunch of debt, but it also impedes your cash flow, which in turn affects your ability to build wealth. And so ask yourself, what is the plan for leverage in your life? When are you going to reduce it? How much do you want to have long term, etc. And, and keep that in mind when you're, when you're doing things like financing a second home that may or may not be a great investment property.

Great. Yeah, that's a great discussion.

And I guess we could talk about Airbnbs, too. I mean, airbnb is a second job. You're running a hotel business, so you've either got to hire somebody to do those aspects of it, whether it's cleaning or turnover, the actual booking, that sort of stuff, or you got to do it yourself. And as a doc, you got to ask yourself, is this a good use of my time or am I better off, you know, doing one more case or rounding on one more patient or whatever it is that you do as a doc.

Let me play the devil's advocate here. A lot of real estate investors love short term rentals because now it's active income that can offset your other active income. And especially if you can put in a significant amount of time into this property in the first year, you can claim rep status, right. And actually get all of all of the losses written off against your active income. But you have to be spending a considerable amount of time at this property. So a lot of people leverage or leverage a short term rental and then spend a lot of time in on the first year, claim the rep status and take the tax benefits of that and the next year do the same thing with the next property and then, you know, and outsource after the first year. That's a way to do it. That's a way to do it. But this again, like Jim said, this is introducing a lot of different factors into your life to try to get tax benefits. But it's very difficult to be a full time doctor and do this. So you have to be prepared to be a part time doctor and a real estate professional.

Yeah, Exactly. I mean rep stands for real estate professional. Right. The requirements, 750 hours a year and no more than that doing anything else. So that means you cannot be practicing more than you're spending time on your real estate business. And you're not going to come up with 750 hours a year on one rental. You know, it's going to take more than that to get to your 750 hours. And at a certain point you gotta ask, what do you wanna do with your life? Do you wanna be a practicing doctor? Do you wanna go do real estate? And if you wanna go do real estate, I totally agree, you should get real estate professional status and get those tax benefits. But if you're actually, you know, went to medical school and residency because you wanna practice medicine, this may not work out well for you unless your spouse is the one who goes for real estate professional status. But we have somebody who works here at the White Coat Investor that has a short term rental property. It's got seven units in it, managed primarily by his spouse. And guess what? She doesn't put in 750 hours a year. So they don't get real estate professional status, you know, and that's with seven units. How many units do you, are you going to be managing? You know, it takes a certain number to really get to 750 hours. You know, I'm sure lots of People fudge the numbers. It's a little bit of a gray area, but come on, it's got to be reasonable or it's not going to pass audit. All right, enough about the second home for Airbnb. Let's talk about Roth conversions. Here's a question from Anna.

Hi, this is Anna. I imagine you're getting a lot of questions about Roth conversions and I was wondering if you could do a segment on them specifically regarding whether it is beneficial or not to do Roth conversions.

For high income professionals during their standard working years.

And also with the assumption if you.

Weren'T doing Roth, that the tax savings you would get from tax deferred was.

Being used to go into investment accounts.

Thanks for all you do. All right. Always happy to talk more about Roth conversions. It's a popular topic, it's a frequent topic we address here. And part of the reason it keeps coming up is because it's complicated, it's not straightforward. There is no awesome rule of thumb. And it's kind of the same whether you're talking about doing Roth conversions, which is taking money that's in a tax deferred account and moving it into a tax free or Roth account, or whether we're talking about making 401k contributions as Roth contributions or tax deferred contributions. It's a complicated question. I mean the only rule of thumb I've got which isn't really perfect is that during your peak earnings years most doctors should do tax deferred contributions and in any other year you should do tax free contributions and consider Roth conversions. But even that rule of thumb there are tons of exceptions to. What would you advise somebody who's asking a general question about Roth conversions? What should they be thinking about?

So what you should be thinking about is your tax rate now versus your tax rate in retirement. If you're going to be paying more taxes, higher percentage on your earned income right now than you would be in retirement, then it would make sense to lower your pre tax, lower your taxable income now when you're in a higher bracket and take the and pay the taxes later when you're in a lower bracket. Also remember that you don't pay taxes in the first 40 or so thousand dollars that you actually get as income. So when you're retired and also you're not going to have most likely have a mortgage or as many expenses when you're retired, your expenses and your the amount that you need to live on is going to be lower than what you're earning right now. So it makes A lot of sense as a doctor when you're earning a lot right now to do pre tax contributions now and then do Roth conversions later. But you can also, it does help to have a Roth bucket and a pre tax bucket of money to play with in retirement. And a lot of ways that we, a lot of people in our community set this up is by doing pre tax contributions into the 401ks, but then also doing a backdoor Roth. So you have a little bit of Roth money that you can withdraw from to moderate the taxes when you're retired.

Yeah, I think that is as good as we get for a general rule. I see a lot of confusion on this. A lot of people don't understand the difference between a Roth conversion and a backdoor Roth. You know, they use the terms interchangeably and these are specific terms with precise meanings. You know, a backdoor Roth IRA is a process. It's a two step process. It involves a contribution to a traditional IRA that typically is not deductible because the person contributing is a high earner. And then step two is to then do a Roth conversion of that money to move it from the traditional IRA to the Roth ira because you didn't get a tax deduction on it. There's no tax cost to doing the conversion. That's a backdoor Roth ira. That's not really what we're talking about with this question. So keep that in mind that it's yes, there is a Roth conversion part of that step, but there's no tax cost to it. That's really not what we're talking about here. We're talking about when you actually got to pay taxes on the conversion or on the money that you contribute to a Roth 401, et cetera. And a lot of when you start talking about the exceptions, the main exception is if you're just an awesome saver. If you just save tons and tons of money, you're going to work for a long time, you're going to have a huge ira, you're going to have a serious required minimum distribution problem, which is a good problem to have, right? That you have all this money, all this income in retirement. That's when you start thinking, well, maybe Roth makes a little more sense now. You know, maybe I should do Roth conversions even during my peak earnings years. Maybe I should do Roth contributions even during my peak earnings years. It certainly does some cool things with estate planning, right? When something's inside a retirement account. Because when you're paying the taxes on a conversion, you're essentially moving Money from taxable into a tax protected account. And in that tax protected account, money grows a little bit faster. And money will also be able to be stretched once you die. Your heirs can stretch that money out, that tax protection out for another 10 years. It's not as good as it used to be. They used to be able to stretch it over their entire life, but you can still stretch it for 10 years. And that's a huge estate planning benefit. You can also name beneficiaries for it. You know, there's none of this probate crap. You got to go through with that money once it's in that retirement account. You just name a beneficiary when you die, they show a death certificate and they've got the money right away without any hassle. And then of course, in most states, having money in any sort of retirement account provides substantial asset protection benefits. And so that's another advantage. Anytime you can move money from a taxable account into a tax protected account, you're usually also moving it from a, a non asset protected account to an asset protected account. And that can be a good move as well, but you don't necessarily want to pay a whole bunch in extra taxes just to get those benefits. But there's even more to it. I mean, a lot of it comes down to, well, who's going to get this money? Who's going to spend this money? Are you actually going to spend it during your lifetime? Because what ends up happening is a lot of people get into retirement, they spend their taxable account and they spend their tax deferred account and then they die, they never get to their Roth account, they leave it to their heirs. Well, that's great if their heirs in a top bracket. But if their heirs in the 15% bracket, or I guess we don't have a 15% bracket right now, if they're in the 12% bracket or the 22% bracket, and you did all these Roth conversions at 37% and then you gave the money to them, that probably wasn't a great move. You know, same thing if you're leaving the money to charity, right? When, when a charity inherits a traditional ira, they don't pay taxes on it. So if you're going to leave anything behind to a charity, you ought to consider leaving behind your traditional ira or even better, your HSA is a great thing to leave behind to a charity, right? HSA sucks to inherit. If you're not a charity, you got to pay taxes on the whole thing in the year you inherit it and take it out of the account. But if the charity gets it, they don't have to pay taxes at all on it. So part of it is, where's the money going to go when you die? And when you're 30 or 35 or 45 years old, you don't have all these answers. You don't know what tax rates are going to be in the future. You don't know how long you're going to work. You don't know how much you're going to save or how well your investments are going to do or who you're going to leave your money to. And so it makes these decisions really, really hard. And that's why we try to come up with rules of thumb, but they're just not perfect. So if you're not sure what to do, split the difference. Do a little bit of a Roth conversion, do a little bit of Roth contributions to your 401 and split the difference. And at least that way you'll minimize the regret of doing the wrong thing somewhat. I've tried to guess at every stage of my life of what I should be doing, Roth or tax deferred contrib, and I've guessed wrong several times just because my life changed as I went along and it turned out what I thought was going to be the right move probably is not going to be the right move in the long run. So you do the best you can. All right, let's take a question from David on Robo Advisors. Good times. Hi, Dr. Dali. My name is David and I'm a practicing physician in Long Island, New York. I have a question for you today about Robo Advisors. So right now I am currently maxing out my 401k and my backdoor Roth and whatever money I have left over, I typically steer towards either a brokerage account or paying down my mortgage. And I kind of do a little bit of each with the extra. In terms of the brokerage account, I've chosen to go with Wealthfront, which seems to be a pretty highly reviewed and highly rated Robo advisor. You know, in general, the costs are 0.25%, so it seems pretty low. And their benefits theoretically are that they perform tax loss harvesting and direct tax indexing, where they buy the individual stocks of a mutual fund and can make changes based on those individual stocks as opposed to the mutual fund as a whole. I guess my question is, do you think that it's risky putting all my extra money towards a Robo Advisor? It just seems like for 0.25% I probably would Net more positive than the expense of 0.25% with these maneuvers. I know that these are things theoretically I could do on my own, but as the account grows larger, I would imagine they have better resources and better algorithms than I do. So I'm just curious to hear what your thoughts are on this. And thank you again for everything that you do. You know, this is one of those dilemmas, right? Because there's not necessarily a wrong answer here, but there's nothing here that I'm getting super excited about either. A robo advisor that doesn't cost very much doesn't cost very much. And that's a good thing. The less you pay for advice, the more of your money you keep. Fees matter. And so you're right to be looking at that and asking yourself, am I getting the value out of this that I should be getting? My issue with the robo advisor is that I think there's just a very narrow niche for them, right? If you need an advisor, you probably need an advisor on all of your accounts. And with a robo advisor, they're not going to do all your accounts. They're going to do your taxable account and maybe your ira, and you're going to be on your own for a 401. Well, if you can do it on your own, why do you have a robo advisor for the taxable account? Right. If you can't do it on your own, why don't you have. Have a real advisor that's advising and taking care of all of your money? And so I think it's a pretty narrow niche of people that can actually use this. You know, it's people with nothing more than a taxable account and a Roth ira. What does that mean? That probably means a resident. You know, as far as our audience goes, there's not a lot of people that don't end up having more accounts once they get out of residency. So I think the niche for robo advisors is just not very big, wide, and it's a product that they're trying to sell to a larger audience. And I think there is a place for it, for sure, in people that need an advisor and can just use a robo advisor to manage their assets, because all their assets are in a taxable account in an ira. I think there's probably a niche there, but I don't think there's very many doctors in that niche. And so I don't know that it really works for the people that listen to this podcast very well. Well, they try to sell it with the, you know, well, tax loss harvest. Well, that's great, right? Tax loss harvesting is worth something, but is it worth 0.25% a year on a million dollar portfolio? No way. No way. You're not going to get that much tax benefit out of that. Right? 1% a year on a million dollar portfolio is $10,000. 0.25% on a million dollars a year is $2,500. What's the biggest tax benefit you're going to get out of tax loss harvesting? Well, $3,000 a year against your ordinary income. So maybe that saves you $1,200, $1,400 in taxes. Right. And you're paying $2,500 for it. That doesn't pencil out, you know, you're not going to get enough of a benefit out of that in order to pay for it. And the issue with direct indexing is fine, you know, maybe there's a little bit of tax efficiency gains there. But what happens when you change your mind, right? You change your mind. You no longer want to use this strategy. You want out of Wealthfront, what do you own? You own a whole bunch of individual stocks and you've got a mess on your hands. To clean that up, you gotta sell them, you gotta hold them, you gotta figure out which ones have losses and gains and try to offset them as you get out of that and into index funds. It's a lifelong commitment when you have a strategy like that in your taxable account. And if you're not ready to make a lifelong commitment to Wealthfront to manage that tax account for you, I mean, they've only been around a few years, they may not be around in 60 years when you still need them to be managing that account. And so, you know, I'd be pretty careful adopting that sort of a strategy in a taxable account. What are your thoughts on Robo Advisors?

Yeah, Jim, I would agree with you. I mean, if you are, especially if you're a white coat investor, you've been listening to this podcast for a while, you most likely can do this on your own without the extra costs and really just very marginal gains by going with a robo advisor like I, you know, I don't have a hugely strong opinion against using Robo Advisors, but I just don't see it being that useful for me or anyone else. Like me.

Yeah, I think that that's, that's the truth. I mean, I mean, tax loss harvesting, right? This is one of those things you do a few times in your mid career and then you've got so many tax losses that you're never going to use them. All right, Imagine you've got a million dollar taxable account, right? And you hit a big bear market and, you know, maybe you're able to tax loss, harvest $100,000, $200,000, right? At $3,000 a year, how long do $200,000 in tax losses last, right? Six, seven decades, right? You've got enough. How many more tax losses do you need? Unless you've got some sort of tax loss, you know, some capital gain coming up in your life that you need to offset. You know, that's the only reason I keep grabbing tax losses is because, well, what if I sell the white coat investor someday, right? Maybe I could use some of these tax losses. And so I keep booking them when it's convenient and when I have a big tax loss. But, you know, I was way too excited about tax loss harvesting early on in my investing career, you know, because then you come to the next bear market and you get so many tax losses you're never going to need them again just from doing like two trades, you know, two round trips with the tax losses and all of a sudden you have tons of tax losses and you don't need any more. Once that taxable account gets to a certain size. This is not a great use of your time or your fees to pay somebody else to do it for you. All right. Hope that helps, David, with your decision whether to continue to use Wealthfront or not. I mean, I don't have anything against the company. They do what they do. You can read what they do. And if you feel like that's adding, you can try that. Just try to see the end from the beginning and decide if that's really something that you want long term. All right. Anything else we ought to cover today, Fisha, that we haven't? The audience needs to hear.

I need to hear where you're going in Costa Rica.

Yeah. So this is going to be a fun trip in Costa Rica. By the time you hear this, I'll hopefully be back and it'll be a distant memory. But it's a canyoneering trip, so flying into San Jose, driving up into the mountains and we're exploring some, some waterfalls and canyons that were just recently explored for the first time. And then we're going to do a little bit of pack rafting and we'll be back in six days. So it's a pretty whirlwind trip, but should be a lot of fun going with a friend and brother in law and we found a canyoneer down there that we're going to team up with to do some canyons. So should be a lot of fun.

Sounds amazing. Hope you have a great trip.

Yeah, thanks. One thing that we ought to mention, I don't know which way it's going to go. Right now it's March 28th. By the time you hear this, it's going to be mid May. But remember, May 1 is when the student loan holiday is supposed to end.

Right.

And so keep, keep in mind if the student loan holiday has ended by the time you hear this, you may need to refinance your student loans. So go to the recommended tab under whitecoatinvestor.com find those recommended student loan deals. You get cash back. We're throwing in our flagship fire your financial advisor course for anybody who refinances through those links and check that out if they do extend it, which wouldn't surprise me at all in this election year. Then again, pay attention to when your federal student loans stop being at 0%. Eventually you'd think they will stop doing that, but you never know. Maybe they'll come through and forgive them all or something. Who knows what Congress is going to do. But if you have federal student loans, make sure you're keeping up to date on that and as soon as we know what's going on, we'll announce it to you on the podcast.

Absolutely. Another deadline I'd like to remind people of is the October 31 deadline to consolidate your student loans. If you are looking towards getting the PSLF waiver forgiveness, which is the broader forgiveness that a lot of people are eligible for now. So make sure you look at that as well.

Yeah, this is the emergency program put in place because of the pandemic that President Biden was able to put this program in place on an emergency basis. Basically, people who made payments under programs that didn't used to count for PSLF, or they made late payments or they made payments that were a dollar short, those payments all didn't used to count. Now they do count, but only through October 31st. And so make sure you file the paperwork you need to for that. 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 is 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. Well, don't forget about our book us out. This is the asset protection book, the White Coat Investor's Guide to Asset Protection. You can pick that up on Amazon. Now. It is not expensive, right? It's even cheaper if you get it on Kindle. And it'll give you the information you need about asset protection. All right, let's go over our latest review. Disha, you want to tell us about this one?

All right. The real deal. This guy knows what he's talking about. No hyperbole, no scam. Just a common sense, evidence based and rational guide to personal finance and investing. I've been listening for two years. It would have saved me literally six figures had I discovered him earlier. Oh well, better late than never. Definitely geared towards high income earners. But anyone will be wiser and smarter with their money by listening to this one. Awesome. Thank you so much for that.

Yeah, we really appreciate those five star reviews. They help us to spread the word about the White Coat Investor. Well, we've come to the end of this podcast. Keep your head up, your shoulders back. You've got this and we can help. We'll see you next time on the White Coat Investor podcast.

See you later. The hosts of the White Coat Investor podcast are not licensed accountants, attorneys or financial advisors. This podcast is free entertainment and information only. It should not be considered professional or personalized financial advice. You should consult the appropriate professional for specific advice relating to your situation.