WCI #277: Nonclinical Work for Physicians

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This is White Coat Investor podcast number 277 non clinical work for physicians. I'm your host. I'm the founder of the White coat investor. I'm Dr. Jim Dahli. As a white coat, you have valuable knowledge. Various companies want that knowledge and they're willing to pay you for it. That's why we put together a list of recommendations for companies that pay you to take surveys. If you're looking for a profitable side gig for not too much effort, getting paid for surveys could be the perfect solution for you. You can make extra money, start a Solo 401 and use your medical knowledge to impact new products. One of the WCI columnists makes an extra $30,000 a year just doing these surveys. Sign up today and use a fraction of your downtime to make extra cash. Go to whitecoatinvestor.com mdsurveys you can do this and the White Coat Investor can help. Welcome back to the podcast. It's always good to have you here. It's actually been a month since we recorded one, so it's nice to get back in the groove. Although sometimes it feels like the first time. Every time when we get back together in this room and have to connect everything back together. But hopefully we'll put out another great episode for you. In the meantime, keep doing what you're doing. It's important work that you do that you that's why you're a high income professional. Whether you're a physician or a dentist or an attorney or whatever you are, the reason you are paid so well is because you worked really hard to learn a very unique set of skills and accumulate a database of knowledge that is really important and can really impact other people's lives. So I know you don't always get thanked for what you do. People think you're taking advantage of them or whatever, but the truth is you do important work and I thank you for it. All right, I got an email that said I have perused your entire podcast list so far and have not found one where you have a guest or yourself talking about opportunities for physicians in other industries such as tech pharma or consulting. It would be great to hear more about these avenues from people who are doing it full time or part time or as a side gig to increase income. What are the pros and cons what type of income can we expect? Where do we find such jobs? And can academic physicians do these as a side gig? Well, I always think it's interesting. I get people that ask me questions like this and they're like, the podcast hasn't covered this. And I'm like, it hasn't. I mean, we got 277 episodes out there now, plus a bunch of milestone to millionaire podcasts. It's hard for me to believe there's any subject that we haven't hit yet, but it's entirely possible that we have not hit some subjects. However, keep in mind the podcast does not exist in isolation. There is a whole website out there with 2,500, 3,000, I don't know how many many posts on it. And there are certainly a lot of posts on the blog about side gigs about non clinical work. For example, if I go to that search box in the upper right of the website@whitecoatinvestor.com and put in non clinical work, I pull up A post called 5 Ways to Get out of Clinical Medicine. Another one, seven physician side gigs, pros and cons of each. Another one, how to make extra money as a physician. The next one, the list of physician side hustles. Another one, a side hustle to consider medical, legal or insurance consultants consulting. The next one, how being an expert witness can make you a better doctor. Another one, a career in biotechnology for physicians and scientists.

Right?

We got lots of material out there about side gigs about non clinical income opportunities. You know, we just ran a post recently about surveys that you can take. So there's lots of stuff out there. But let's go through a little bit of this material that is there just so it exists also in podcast form and talk a little bit about about it. For example, five ways out of clinical medicine. Well, the first one's retiring early. You know, lots of people do that, right? A great source of non clinical income is the dividends from, you know, stock index funds, the rents from real estate, the interest payments from bonds and savings accounts and CDs, right? That's one option to get out of clinical medicine. To provide aside income is your investments, right? And so hopefully you're working on that as you go along. Another thing you can do is fix your job, right? Because a lot of times the thing that's driving people out of clinical medicine is they're just in a toxic job. They either need to change jobs or fix that job. So keep that in mind. Entrepreneurial pursuits, right? Maybe the best pathway out of medicine, high risk, you Know, one of the great things about medicine and really law and pharmacy and all kinds of other fields is that you get a high income. But most importantly, it's fairly guaranteed. You know, not so much in laws in medicine, but the vast majority of people that graduate from medical school end up making a pretty good income. You know, there's not a lot of risk there. That's not the case with entrepreneurial pursuits. Yes, there's a possibility to have a massive income, but the truth is most small businesses fail. Most entrepreneurial pursuits don't go anywhere. But it is an option. Of course, another way out is non medical jobs, right? That might require another degree like a JD or an MBA or something like that, or a financial advisor certification. And a lot of people actually leave medicine, do something that pays a lot less. You know, the encore career kind of folks, you know, they want to go be a rafting guide or something, you know, that's an option as well. But the vast majority of people take the fifth option, which is some sort of medical job, right? You're taking advantage of the skills and knowledge you have. But, but you're not in clinical medicine. And they may be doing medical writing, resource utilization, health insurance, medical legal work, pharma, managed care, lots of options there. You can even move into administration in the hospital or practice management consulting, working in information systems, lots of options there. And once you have a medical school education, a residency training, and you've been practicing for a few years, you're really valuable to a lot of companies out there and they'll pay for your expertise in that regard. Here is a really great post we ran in January of 2021. Seven physician side gigs for extra income. And this was actually a guest post from an emergency doc, Dr. David Baran. And let me go through the seven physician side hustles that he, that he blogged about in that blog post. The first one was a file review for medications. And the best part about this post is he's done a lot of this stuff, right? He was hired as an independent contractor by a company who wanted docs to review medications. They wanted to minimize the use of opiates and maximize non opiates for chronic pain patients. And so he'd get charged electronically, answer questions about each patient, a phone call with the prescribing physician. And actually he got out of the phone call part later on. But his pay ranged from about what he gets for a typical clinical hour to about half of that. So it just depended on how long the gig was for that. But he liked that it was flexible and easy to do and decent pay, and it was consistent work. Okay. Another thing he did was file review for peer review. Again, he was an independent contractor for a company that did external peer reviews. A hospital needs someone to review a physician's care. And then the company would come to you when it was a physician in your specialty. So you'd fill out questions in a report format and you had a certain time period, you had to do it. So he negotiated an hourly rate with the company. It ended up being a little bit less than he made clinically, about 75% of what he was making clinically. He was told that was a high rate, but apparently it was still pretty intellectually stimulating. But it was kind of irregular work. It was pretty choppy, was his complaint about it. Side hustle number three, administration.

Right.

Lots of us have done administrative work off and on throughout our careers. And he did increasingly larger jobs until he acquired and administrative title. He became proficient writing reports and eventually he became the only one who knew how to do that. So he became more valuable again. His pay was less than his clinical pay was 50 to 75% of what he was making. But he liked getting paid to strategize and work at the system level. You know, like anything in administration. He said there were cons. He says the grass is only greener administration because there's more crap to fertilize it. So there are some downsides to being an administration for sure. All right, the next one. Pharmaceutical research for third parties. He put some information on LinkedIn. A third party conducted him that was doing research for a major drug company. They paid a lot more than he was making clinically, about 150% of what he was making clinically for the actual time of training and work. And of course, they covered all of his costs. He liked learning new skill set. He liked making more money, like getting some insight into the research industry. He didn't feel like there's anything unethical about it, but it still felt a little bit like he had sold out. Next thing was expert witnessing. He put his name on the American Medical Forensic Specialist website and uploaded a bio. There he was contacted by some law firms that paid him to be a witness on a case. He made 125 to 150% of what he was making clinically and got to negotiate that himself. He saw the big pro as learning what attorneys look for in a medical legal case. But the con was that he felt like there was kind of an unwritten rule about how much you could actually do this before you start looking like a hired gun. His number six side hustle was being interviewed by industry for new drugs and processes. He ended up making good money with that, about 150% of what he was making clinically. The pros were that it was interesting work and he learned about a new industry. But again, it was kind of spotty, choppy work. It wasn't regular, it wasn't something that he could do and count on that to put food on the table. And then his last one was medical writing. He started a blog. As you've seen from the white coat investor, they're starting to blog is easy growing. It's not quite so easy. His problem was he hasn't made any money doing it, which is the case for most bloggers. He said he's made about 53 cents. That doesn't surprise me given that my first year blogging, I think we brought in $900 in revenue and I had expenses that were at least equal to that. So that's not too unusual. The nice thing is there's no right or wrong way to do it. Anybody can get started and you get to take it whatever direction you want to do. So those are some great non clinical physician side gigs. We have another post on the blog that's called the list of physician side Hustles.

Right?

And this thing's got, I don't know, there must be 60 or 80 different side hustles listed here. Everything from doing freelance work on Upwork or Fiverr to teaching Pilates, to becoming a venture capitalist, to selling items on ebay or Etsy, to purchasing a franchise. In fact, we did a podcast not that long ago about non food franchising. So that's another, you know, non clinical option. At any rate, my point is there's lots and lots of different things that you can do. In fact, why don't we, why don't we get Gretchen Green on the line here? She's one of our partners. She's put together a course on expert witnessing. So let's get her on the line. She can tell you a little bit about that course while we're talking about this subject. Okay. In this episode, we've been talking about all kinds of side hustles and non clinical income options. And here with us as a special guest is Dr. Gretchen Green, who's going to tell us a little bit more about expert witnessing. She actually teaches a course about how you can become an expert witness. Basically takes you soup to nuts and will teach you what you need to know in order to engage in an expert witness side hustle. But that course is actually enrolling right now from between August 19th and August 29th. You can enroll in the course then it's going to be closed for months and months. So you come through these courses as a cohort with other people. So it's going to be live as soon as you enroll in the course. And you can enroll in that@whitecoatinvestor.com expert witness. And I'll tell you a little bit more about that course after we finish this interview. Gretchen, welcome back to the podcast.

Thanks so much for having me back.

What kind of feedback are you getting from your students that have taken the course in the past?

You know, time flies since 2020 when I founded this course and I've already had students successfully complete trials. They have launched and built their expert witness businesses. They have put these skills to work. They have found additional benefits. You know, as I'm sure you know, you're discussing with additional side gig income that has truly changed their lives. I love getting photos of my expert students in their suits as they're going to the courthouse, when they're preparing for depositions and afterward when they've said what they've learned, what they'll change, and how they'll modify their approach to increase their success in the future. It's just been so exciting to see everybody's success.

Well, they've got to have a use for that suit that they last wore while interviewing for residency, right?

Exactly.

Do you find most of your students are doing work both for plaintiffs and defendants? Just defendants, or how does that typically split down? Do you know?

Yeah, I think they're all doing a really good job of balancing this objective approach to expert witness work. That's so important that my students understand that we're reviewing cases objectively, regardless of who calls that. This is part of how you build your skill set as an expert from both the plaintiff and the defense side. Ultimately, this is the kind of thinking and skill building that makes us better doctors. And that's really, I think the best benefit of having these types of skills is that we can positively influence patient care for the better.

Now, this is one of those side gigs that you kind of need to still be practicing.

Right.

You can't just leave medicine and then expect to carry a lot of weight in the courtroom as an expert witness for long, can you?

That's true. You do need to be practicing clinically. There are some state regulations that vary, but they will allow you, if you retire, to finish out certain cases in certain timeframes, typically 12 to 18 months. But by and large, this is something that you do while you are actively clinically practicing. The good news is though, that this does vary and the requirements are fairly low compared to what we consider full time in medicine. You know, as you always say, you know, if you want to cut back your hours, try first going full time. And this is exactly true that doctors think that, that we're not working full time if we're not working 80 hours a week. But you can be practicing a couple days a week. I have been decreasing my clinical time now over the past few years to about two and a half days a week. And that fits really well with doing expert witness work as a side gig. You know, even someone who's billing an average rate as a physician, as an expert with three to four hours of expert witness work per week, can generate 100,000 in side gig income every year.

Yeah. What is the typical hourly that people are asking and getting for expert witness work?

Normally this range is between 500 and $900 an hour. And this is something that shocks a lot of docs when we're looking at contract negotiation and the hourly rate that we get paid typically for clinical work. This work is reimbursed at a high rate, typically higher for surgical subspecialties. But there's no minimizing the impact that general practices like internal medicine, family medicine, even those specialties who see more general populations are still billing at the 500, $600 per hour rate and can typically have a lot of case volume because that's just the population that has a lot of cases, periods. So when you're working from a big denominator, you're going to get a good volume of cases that are available for experts to take.

You know, somebody out there just heard 600 bucks an hour or 900 bucks an hour, and now they're interested. So tell us what's in the course. What, what are they going to learn when they take your course?

This is the course that I wish I had had in as one stop shopping when I started out. It covers everything from how you handle that first call from a lawyer out of the blue so that you know exactly what to say, you know exactly what materials to provide, how you craft a CV to best highlight your skills and expertise all the way through case organization, how to communicate with folks in the legal field, how to help educate and bring your best information and knowledge to educate lawyers, juries, trial and deposition situations, and then also the business building aspects. And this is something that I never anticipated when I became an expert was just how much business building I would learn and how that would set the stage for me to do so many other entrepreneurial efforts, not including not accepting your real estate, but then also founding this course. Once you build these skills, there's no limit to how they translate to new opportunities you can create in your life.

So you can start the course as soon as you enroll. How long does it take? You know, if you're a motivated student, how quickly can you get through the course?

The course runs over a four week period. We've accelerated it so that people can get all the information that they want quickly. And you're ready to go as soon as four weeks. You can of course start building your lawyer network as soon as you start the course and work pretty quickly through those modules. We've got two or three that go live each week and then with a live Q and a session at the end of those four weeks so that people can really get going, get their questions answered and build a network with other experts through the expert resource Facebook group.

Now, this course isn't cheap, so this is for serious people only. I mean, this isn't for someone that's just dabbling. It's someone that's serious about becoming an Expert Witness. It's $3,197, but it now includes CME, correct?

It does. And this is a great example of physician innovation that has expanded to the digital course community and made it possible for us to offer this at a really affordable rate without having to increase the course cost much. And the great thing is this course pays for itself. With your first case, as soon as you get going, you get one case retained, your course is going to pay for itself. And then multiple times after, when you know from the beginning that you're billing at an industry appropriate rate and how to structure it to make the most of your business. So also, it's typically tax deductible, although this always depends on people's individual circumstances. So it's really a no lose proposition.

Yeah, tax deductible. Or could use your CME fund to purchase it. Now that it provides cme, is there any sort of guarantee, Is there a money back guarantee or anything? If they get into it and decide maybe I don't want this, we do.

For the first week offer a money back guarantee. We ask that you demonstrate that you've done the modules, that you've gotten your questions answered. I'm really accessible during the course and I try really hard to offer that level of support. That people expect expect from getting to learn from someone like me who can show them the ropes firsthand. I've had only very few people ever ask for a refund and it was typically because of outside life circumstances and things. Universally have received great feedback about the course. So we do offer it. Just hardly ever anybody uses it. The refund.

That is awesome. Well, we really appreciate you coming on and telling us more about it for those who are interested. Whitecoatinvestor.com ExpertWitness and if you buy through that White Coat Investor affiliate link, we're going to throw in a special bonus. We're going to throw in our 2021 CFE course. Absolutely for free. And that is another $779 value. Teaches you all kinds of stuff about personal finance, about financial wellness, about regular wellness, and it's good for another 17 hours of CME. So now we're talking about a total of 29 hours of CME you're going to get for this. That is probably your entire annual allocation for CME. So. Whitecoatinvestor.com expertwitness thank you so much Gretchen for coming on the podcast.

Thanks so much for having me.

Okay. That's always wonderful to hear from Gretchen. Great course. Hearing great things about it. Haven't had a single complaint and even if there was, you can get your money back, right? Nothing to lose. That's one of the things I love about these courses docs are putting together online is they almost always come just like ours do, with a money back guarantee. So although some are more expensive than others, you know, if you don't like it, get your money back. What have you lost? Just your time. So check that out. Whitecoatinvestor.com ExpertWitness all right, let's get into your questions here. This first one comes from a first generation medical student that's now a resident. We're asking about residency. Let's take a listen.

What can a first generation medical student do during residency to better prepare for life afterwards? I go to a private med school on the east coast and unfortunately I have no financial help for my family like many of my peers do. I will be a little less than $400,000 in debt by the time I'm done and I won't be able to tackle it efficiently for at least three to five years after graduation. I'm uncomfortable with waiting so long, so would like to know what I can do in the meantime.

All right, well, I get that you're uncomfortable. I'm uncomfortable too when I owe somebody $400,000 in growing, and I have no possible way of paying that debt back. There's a reason people are uncomfortable. However, you got to keep this in mind. You got to look at the big picture. First of all, getting uncomfortable now is kind of silly, right? You already made this decision. You made this decision when you chose to go to medical school and pay for it with debt. You had other options. You could have done an MD, PhD. You could have signed up with the military for HPSP. You could have not gone to medical school. There are other options out there, okay? But you made a decision. You said, I'm going to spend the next 10 to 15 years of my life learning how to become a doctor and paying for it. And the way I'm going to do that is I'm going to borrow the money, okay? Whether you thought it through all the way or not, that's the decision you made. And now partway in, you're getting squirrely. You're having some regrets, right? Well, assuming you still want to be a doctor, I just want to point out that this decisions already been made for you, right? So there's no point in dwelling on it. The decision is water under the bridge, okay? You've already chosen to borrow $400,000 to do this, okay? Now let me give you a little bit of hope. You know, assuming you don't hate medicine, which definitely makes this more complicated, or that you're really struggling to the point where maybe you won't match into a residency and you truly won't have a good way to pay this money back. But for the vast majority of doctors, $400,000 is not some insurmountable sum. That is a sum of money that can be paid back by most doctors simply by living like a resident for two to five years after residency and directing the difference toward your student loans and other financial goals. Think about it, okay? The average doc right now is making 275. And again, there's no reason you have to settle for average. You can make more than that if you're willing to do so. Let's say you're making $300,000 when you're coming out of residency, okay? So you're making $300,000 a year and you're willing to continue to live like you are as a resident, right? So let's say you're spending 50. You know, heck, give yourself a raise, all right? Spend $75,000 a year. That's a pretty good raise. That's a 50% raise. Anybody in corporate America would love that raise, okay? You're going to pay more in taxes. Let's say you're paying $75,000 in taxes. Maybe that's probably about right. So you've got $150,000 left. Now, if you take that money, $12,500 a month, and you send it to your student loan lender, how long is it going to take you to pay off $400,000 in debt? I'll give you the answer. It's less than three years, okay? So you can pay this off. It's going to involve medical school. It's going to involve residency, three to five years, maybe a fellowship. And it's going to involve three years afterward of living like a resident. And boom, medical school is paid for. But here's the really great part. When it's paid for, you still have that same income, $300,000, whatever it might be, right? And now none of it is going toward those student loans. So you can turn around and take some of that income and spend it and go buy yourself a Tesla. You can go on some awesome vacations to Paris. You can get yourself, you know, some nice handbag, whatever it is you want, right? That makes you happy. You still have to save some money. And you should redirect some of that money toward your investments, right? So that you can eventually retire comfortably from medicine. I recommend people always save 20% of gross for retirement, but the other 80% you can spend and you can have a very nice life on 80% of what a physician earns. Trust me, it's a really fun life. So just take care of business early on, and then you can move on to your career and get things taken care of and have a great financial life. So I get that it makes you nervous that you're not even making any money and you owe $400,000. And then you're going to spend years only making 50 or $60,000 and owe $400,000 and growing. But the truth is, you are going to be able to take care of this. Okay? There's also one other option, especially if you spend a long time in training, right? Public service loan forgiveness. So almost surely the vast majority of your debt is federal student loans. And if you make 10 years of payments on federal student loans while working as an employee of a governmental institution or of a nonprofit institution, the rest of your debt disappears. And so you could have two or three $400,000 forgiven via public service loan forgiveness. So that's an option as well, right? It might mean you stay in academics for a few years after you Finish. That's not so bad. I did academics for three years after I got out of residency, and I'm not Mr. Academic by any means, so it's not that big a deal. You're going to be able to take care of this debt. You need a plan for it. So put a plan in place and then you can move on and not worry so much about this stuff. Don't let it hang over your head. Concentrate on being a good doctor, not on how you're going to pay the bill, because you're going to be able to pay the bill with a reasonable plan. Now, what should you be doing in residency? Well, there's probably about five things worth doing in residency. The first one is to have a plan for your student loans. Okay? What that usually means is any private student loans you refinance, right, as you come into residency, any public student loans you're probably enrolling in repay, unless you're married to another earner. Then you probably need to get advice. I Recommend Calling up studentloanadvice.com and paying for an hour of advice if you're in that situation. But if you're like regular single medical student, just enroll in repayment for your public loans, okay? So student loan plans, number one. Number two, you got to get some disability insurance, right? Residents get disabled all the time, number one. But number two, that's as cheap as it's ever going to be for you, right? And you haven't developed, you know, medical conditions. You haven't taken up a bunch of, you know, risky hobbies like scuba diving and mountain climbing. That's a good time to get that insurance in place. If anybody else depends on you. You also need term life insurance. Okay? So that's three things. Student loan plan, disability insurance, term life insurance. You need a financial education. You ought to learn a little bit about finance as you go through residency and particularly the last year and as you become an attending, you really ought to concentrate, be reading a few financial books, maybe take our fire your financial advisor course, those sorts of things, and have a written plan in place. When you get that first attending paycheck, you ought to know where the money's going for your first 12 attending paychecks. And that's just basic financial planning. So I like seeing a financial plan in place. Now, it's good to save something during residency just to get in the habit of saving. And usually you want to do it in some type of a Roth account, unless you're trying to work some scheme to get a little bit more of your Public Service Loan Forgiveness money. Your loans paid off a little more than paid off by pslf, but for the most part, you know, open a Roth IRA. Look at the 401K or 403B at your residency program. If they give you a match, make sure you get that. But try to save something just to get in the habit of saving as a resident. But don't expect to get rich as a resident. It's not going to happen. The way you get rich is you finish your training, you become a good doctor, you get a good job, and you make the attending money.

Right?

That attending income is your greatest wealth building tool. So don't feel bad that you're not able to pay off your $400,000 in debt with a resident income. Nobody expects you to, and you shouldn't expect yourself to. So give yourself some grace. There's you've signed up for the whole plan. The whole plan is medical school, residency, and a few years after residency. All right? And you're in the middle of it. So don't despair. The plan's going to work. Don't bail out in the middle of it. All right, next question. This one comes from email about non qualified deferred compensation plans. I have a question that I haven't heard on the podcast much. It's on non qualified deferred compensation plans such as 457B's or in my case, 409. It's always interesting when they come up with yet another plan. I have the opportunity to participate in a deferred comp plan at my job and the employer offers a match. Always a good idea to get the match. So I'd like to participate if it makes sense. Both the deferral amount and choice of distribution are determined every year specifically for that year's deferral, and is not modifiable once submitted. That's kind of interesting. The distribution options are in service while employed or at termination as a lump sum spaced evenly over as long as 10 years. It's not terrible, especially if you're going to be at that job long term and those 10 years are in your retirement. My question is, what do you think about the in service distribution option? My time frame to retirement is at least 20 years, but maybe even 30 years. And while I believe my employer is stable, I'm nervous to bet on the solvency of any company for as long as 30 years or even 40 years. If I do distributions spaced over 10 years after retirement, the in service choice seems like a decent option to me. Say leave the money for 10 years and withdraw it in service. I'll get 10 years of tax protected growth, get the employer match and worry much less about the solvency of the company. What do you think? I think it's fine. You know, a lot of these questions about distribution options come down to how much of your money's in this thing.

Right.

If you're saving $100,000 a year and $10,000 is going to deferred compensation, well, that's very different from if you're saving $30,000 a year and 20,000 of it is going in deferred compensation, then it's a big old piece of your financial life and you got to be a little more careful with it. But as a general rule, remember these deferred compensation plans, like A457 is the property of your employer, it's subject to your employer's creditors, and so it's not really your money yet. So if you have any worries at all about that employer being solvent, you know, you want to get your money out of there sooner rather than later. In general, 457 money is the first money you spend in retirement. But in your case, would I consider taking it out in even while I'm still working for the employer? Sure. You know, get the match. That's like leaving some of your salary on the table if you don't get that. All right, let's take our next question. This one is about 401 s from a previous employer. This is Mike. Thanks for the question, Mike. Let's take a listen.

Hi Jim. First off, thanks for all you do. I have a question regarding what to do with a 401k from a previous employer. I am an early stage physician who recently decided to leave my current employment and join another group. At my previous employment, I was able to save over $100,000 in my 401k. My plan was to roll that over into my new employer's 401k. However, they do not allow you to participate in the retirement savings accounts until you have been with the group for one year. My question is what should I do with this money now and what is the best way to save for retirement this year until I'm able to contribute to my practice's 401k for background. My plan this year was to just max out my 401k. And since my wife is going back to school for her master's and we will not have a lot of extra income to put towards other savings accounts, should I just leave the 401k money where it is. And save what I would have put towards a 401k this year in after tax income into a taxable account. It seems like I'd be losing out here. I don't believe I can open my own solo 401k without doing 1099 work or being an independent contractor. Any info on best ways to save or accounts to invest in during this quote unquote transition year until I can join my company's retirement savings would be greatly appreciated. Thanks so much.

All right.

Great question, Mike. Man, you know, the truth is, when you're an early career physician, you have so many good uses for money that I can't believe that you don't have some other great use for your money other than putting money in a 401k.

Right.

Most young docs have got some student loans they can pay on. They've got a mortgage they can pay on. Maybe they need to beef up their emergency fund. You know, maybe there's a house renovation they've been wanting to do or they got some beater car still from residency that they need to replace or their spouse is going back and getting a degree like in your case. Or you know, all kinds of options.

Right?

So there's probably some other use of money which is fine to do this year instead of putting that money in a 401k. Don't forget about a personal and spousal backdoor Roth IRA, right? That's 6,000 for each of you. If you do any 1099 work, you can open up a Solo 401. But there's also nothing wrong with investing in taxable, right? Most of my retirement money is invested in a taxable account. It's perfectly fine, it works good. You can invest it tax efficiently. It's not as good as having it in a retirement account, but it's still not a bad thing. So if nothing else, there's no limit on how much you can invest in a taxable account each year. Now what do you do with the old one? Well, you're almost surely not required to take the money out immediately when you leave the company. And so you can probably leave it there for a year until the new one is open and you're able to contribute to it and then you just do a rollover into the new 401. No big deal. Okay. What you don't want to do most of the time if you're a doc is you don't want to take it out into a traditional ira, because when you do that, all of a sudden now your Backdoor Roth IRA process gets prorated and you don't want that. So although that's the standard advice for most people when they leave a company is to roll their money into an IRA where costs are lower, there's more investment options, you have more control over it. That's probably not the right move for a high income professional, at least one who wants to do a backdoor Roth IRA each year. All right, let's do our quote of the day. This one comes from the late Jack Bogle said, do you really want to invest in a system where you put up 100% of the capital, you, the mutual fund shareholder, you take 100% of the risk and you get 30% of the return? Well, I don't think so. And that's why you got to watch your costs, right? Jack Bogle with his low cost hypothesis. All right, let's take another question out the speak pipe this one about long term care insurance.

Hi Dr. Dahl, this is Tom from California. Regarding long term care insurance, I would be interested in hearing your thoughts regarding the various ways to approach this issue. From purchasing a deferred annuity, purchasing long term care policy, purchasing a long term care hybrid product through, through a life insurance, or simply self funding. Regarding self funding, if that is the option to follow, would you recommend setting this aside in a taxable account or in one of your tax deferred or Roth accounts? And if so, given that I am age 60, given that I will not be needing in theory these resources for several decades, the question is, should I invest those resources in a more aggressive manner at 90% or 100% total stock market index to give it the chance to grow to hopefully the size that would be necessary to support this issue. Thank you very much. I appreciate your thoughts.

Bye.

All right, long term care. Here's the bottom line on long term care. I hope you as a high income professional never need to buy long term care insurance in any form. Not as an annuity, not as a writer on a whole life insurance policy, not as long term care insurance. I don't think any of these are awesome options if you got to compare them because you have to have one of them. Well, you know, long term care insurance is my preference, but it's got problems. You know, companies go under all the time. So you paid all these premiums for years. Now when you need it, the company's gone or they have to raise your rates or whatever.

Right.

And then you got to fight with them when you're not in a great position to be fighting with an insurance company. I think you're just better off most of the time if you can just build enough wealth that you don't need long term care insurance. So you know, most of the people in the US just don't build any wealth, okay? And they're going to spend down if they need long term care to Medicaid, you know, amounts that they're allowed to keep and then Medicaid's going to pay for their long term care if they need it. If you've got, I don't know, a million and a half, 2 million, 2.5 million or more, which I would hope most white coat investors would by the time they get to retirement. You can really afford to self insure this, right? So let's say you got to pay $100,000 a year for long term care for five years. Well, that's half a million dollars. You got $2.5 million, that's fine. You're not going to leave your spouse impoverished because you went in a nursing home, right? And if you're single, you may not need it anyway. So what if you go through your $2.5 million, some miraculous way of paying for long term care. At that point you're in nursing home, Medicaid's paying. So not that worried about the wealthy people, but the people in the middle, like you're retiring with six or seven hundred thousand dollars, you probably do need some sort of long term care insurance. So I would probably start with the long term care insurance broker and look at what policies are available. You know, maybe there's a unique circumstance where one of these annuities or whole life insurance policies with the long term care rider makes more sense for you. But for the most part, I try to keep insurance simple. The first thing I'd look for is just straightforward long term care insurance. If you are self insuring, I wouldn't feel like you got to set this money aside in some separate account or designate it for long term care. So there's a good chance you're not going to need it for long term care. It just goes into your regular pot, your regular nest egg, right? It's invested along with everything else. However you're investing everything else, that's the way you invest this.

Okay?

And then if you got to pay for long term care, it's just that money coming out of your nest egg, that's where it comes from. So I think that's the way it works. And I hope I answered your question. Our next question comes out of my email box about organic food the emailer writes. I hope this email finds you well. I have a question for you that is tangentially related to the topics you have discussed in your guide for students. I was curious, is it worth spending extra money on organic fruits and vegetables as a medical student? I ask as I'm a big fan of meal prep and I always wonder if spending the extra money as a medical student is really worth any long term health benefits. On one hand, it is generally a good idea to invest in one's health. On the other hand, the definition of organic is not standard or regulated and a lot of the labeling could just be for marketing purposes. Ding, ding, ding. I think you're seeing exactly how organic works. You know, it's really interesting. I climb in Canyoneer with a friend who is an egg trader. He literally trades eggs. That's his job. He trades them by the semi load and there's free range eggs and there's pasture fed eggs and there's all these different things. And he explains to me what the differences are, right? Cage free and free range and is and how much space per chicken you have to have and what you can feed them and all this stuff. And the differences are surprisingly trivial. And I think that's the way it is with the organic food as well. So you need to be a little bit careful there that you're not buying into just the marketing and the labeling. It's organic, so it must be better. You know, you should eat a healthy diet. I think it's worth spending a little bit more to have a reasonably healthy diet. You know, the truth is, if you're a meal prep person and you're not buying food from restaurants all the time, chances are you're spending a lot less money on food than a lot of other people are. You know, so even if you're a medical student, I would say if you want to spend a little bit more on the groceries that you buy, that's probably fine, especially if it reduces how often you're going out to eat, which is the big expense when it comes to your food, right? It's like Mr. Money Mustache used to say, when you go to a restaurant, it should be a special occasion. You're renting out the place with your own private chef and your own private server. And so you're paying for an experience, not just food. If you're going there just for food, most of the time you'd be better off preparing it at home. And with that money you save, you can buy a little bit nicer food. So I would spend the time to try to eat. Well, does that mean that your carrots have to be organic carrots? I don't know if that's necessarily the case, but if you're really into that, I wouldn't feel guilty about it. I don't think that is going to break the budget and cause you to have some astronomical amount of loans that for some reason you're not going to be able to dig out of as an Attending. All right, let's take our next question from Joanne off the speak pipe.

Hi, Jim. I'm a family medicine doc in the Pacific Northwest. 3 years out of residency. I still have about 200k in federal student loans that need to stay federal. Well, because of the student loan payment freeze, but also to get the state loan repayment program. My question is how to manage the student loan payment freeze. I haven't seen a lot about this. I figure it's just because we're supposed to save and wait for the payment freeze to be lifted. But I was wondering if there's anything better I should be doing right now. I have the money in a high yield savings account and I put a small amount in a CD after you were saying you thought the freeze would be extended past the elections. Thanks for all your help.

Bye.

All right, Joanne, good question. First of all, thanks for what you do. I know Washington needs family docs. I'm sure. I'm not sure I'm understanding exactly what's going on here, but it sounds like you're getting $100,000 from the state toward your student loans every year. So that means the state is going to pay off your student loans over the next two and a half years. So the only reason I would even consider having some other sum of money saved up for your student loans is if you thought there was some reason that might not happen. You know, the equivalent of what I call a side fund sometimes. But that seems unlikely if you're in a program now that's giving you $100,000 towards your student loans each year. Obviously, if someone else is going to pay off your student loans, you don't want to do it. So what I would do with that money, assuming you're not about to change jobs or you hate your job or some reason need to keep it in cash in case something happens to that repayment plan, is I just invest it for the long term. I'd invest it along with your retirement money, you know, and so whatever your retirement asset allocation is, whether that's, you know, 60% stocks and 20% bonds and 20% real estate like mine or something more aggressive or something different. Whatever. That's how I'd invest that money. I wouldn't be sticking it just in a high yield savings account. I wouldn't be sticking it just in a cd. I'd be investing it for the long run. Now, it's fine if your plan calls for some of that money to be in a savings account or cd, but I'm sure it doesn't call for all of it to be in those sorts of investments. So unless I'm missing something, there's some reason you need to keep this money in cash. I would take it and invest it for the long term. That's assuming you don't have some other financial priority that it needs to go toward. But it sounds to me like your student loan plan is to let the State of Washington pay off your student loans. So I would proceed with that plan. It sounds like a good one to me. All right. I got a book in the mail, or rather Cindy picked it up at the P.O. box and she's like, I don't know what the deal is with this book. It didn't come with a note or anything. It's called the Successful Healthcare Professional's Everything youg Need to Know But Weren't Taught in Training. The editors on it are Philip Louie, Michael McCarthy and Todd Albert. And I'm like, I don't know either, but I bet I wrote a chapter for it. And so we turned to the table of contents and indeed I did write a chapter for the book. I've written a number of chapters for books like this over the years. And then at some point, you know, six or 12 months later, the book's finally finished and they send me a copy of it. But this looks like a pretty good book. There's a lot of different contributors to it, a lot of interesting chapters. You know, I don't know if it's everything you need to know, but weren't taught in training, but it certainly covers a lot of those topics. You know, there's a chapter on perseverance and grit, tools for a successful career in healthcare. A chapter on what we can learn from artistic and athletic disciplines, about skills training. A chapter on setting and achieving goals. Another on career planning. Here's one on resilience, how to avoid burnout, provide exceptional care and successfully integrate work and life. That one's by Barbara Waxman. Another one, maintaining and growing relationships, family, romantic and friends. Another one on strategies and tactics to support a high performing healthcare workforce. And there's my chapter, Financial Considerations for the healthcare professional. There's a completely separate chapter on disability insurance. Then there's one on teaching leadership, lessons from history, generalization versus specialization, and the evidence for diversity. So pretty good little book. It's not that long. It's got, you know, it's one of those books that's got, I don't know, 20 people contributing to it. And so you get a lot of different perspectives. But if you like, check that out. The Successful Healthcare Professionals Guide, we'll put a link to it in the show notes. All right, our next question comes via email about FSAs. I haven't heard much mentioned regarding dependent care FSAs, which many larger employers offer. My understanding is that this is a great way to shelter any expenses for daycare, nanny care or school tuition from taxes, which can be significant at the higher tax brackets like Medical FSAs, Dependent Care FSAs, where use it or lose it per calendar year until the pandemic. What I can't seem to figure out is how long the money can continue to be rolled over under the pandemic provisions or has this fully lapsed? Also, is there a phase out for using this type of account at a particular income level? Okay, so FSA Flexible Spending account. This is different from an hsa, a health Savings Account.

Okay.

The main difference is that an FSA is a use it or lose it account. The HSA lasts forever. You can roll it over every year. However, during the pandemic, there were some pretty generous provisions that kind of did allow you to roll that money over to the next year. All right, so let's see if we can answer the questions. The last one first. There's no income phase out. None that I'm aware of anyway, so I wouldn't worry about that. You can use your FSA even if you make a lot of money. The plan, however, might have some type of phase out.

Right?

The IRS doesn't, but your plan might. Like there's one in Michigan that has a phase out based on income. So you do need to check with your plan, HR folks, whoever's running the plan, just to make sure there's not something unique about your plan that that would be a phase out as far as the carryover that's over.

Right.

You could carry it over from 2021 to 2022, but you can't carry it over from 2022 to 2023. You need to spend that money this year. So, you know, go pay your nanny a little extra if you got too much in there. I don't know, but it's not going to carry over again, as far as we know. I haven't heard of anything in Congress being debated that might extend that. So I think it's done. I think it's all over the whole extension thing for the pandemic. As a White Coat, you have valuable knowledge. Various companies want that knowledge and they're willing to pay you for it. That's why we put together a list of recommendations for companies that pay you to take surveys. If you're looking for a profitable side gig for not too much effort, getting paid for surveys could be the perfect solution for you. You can make extra money, start a Solo 401 and use your medical knowledge to impact new products. One of the WCI columnists makes an extra $30,000 a year just doing these surveys. Sign up today and use a fraction of your downtime to make extra cash. Go to whitecoatinvestor.com mdsurveys you can do this and the White Coat Investor can help all right students out there. The scholarship is due August 31st. If you want to apply for the White Coat Investor Scholarship, you need to do that in the next few days. Okay? Usually most of you do. Two thirds of you probably turn in your essays the last week for this thing. But if you want to do we're giving away a lot of money and not very many strings attached to that money. So if you would like to get some of it, apply whitecoatinvestor.com Medical school scholarship we can still use a few more judges too, right? We don't judge it at the White Coat Investor, we just fund it. And our readers are the judges. They decide who wins the money. So if you want to be a judge, you can't be a student, you can't be a resident, but otherwise you can be a judge. Apply by emailing scholarshipcoatinvestor.com, put Volunteer Judge in the title and we'll get you on there. What do you have to do? You got to read perhaps 10 essays and tell us which ones you like best. They're 1, 000 word essays so it's really not that big of a deal and we'd love to have you participate. Thanks. For those of you who are telling your friends about the podcast and or leaving us a five star review, our most recent one comes in from Lee who says always inspiring. This is such a great podcast and an inspiration to medical professionals to take control of their own finances. 5 stars. Thanks for that review. We appreciate it and it does help spread the word. 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.

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.