WCI #296: Charitable Giving and Bonds

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. Hello and welcome to another White Coat Investor podcast. I'm your host, Dr. Disha Spath and I'm here with Dr. Jim Dali. Hey Jim, how are you today?

Doing great. It's always great to be here.

Yes, sir. We're going to be talking about some charitable giving and bonds.

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Thank you listeners for what you do. What you do is not easy. Healthcare is a train wreck right now. Thank you for being there for us. Thank you for being there for all of your patients and thank you for all that you do.

Yeah, I bet if most people are like me, you're dealing with the triple virus threat right now between RSV and flu A and Covid, pretty much. I walk in, they say all my muscles hurt, doc. I tell them they have flu a and about 95% of the time I'm right.

Yeah. And we're seeing like we're getting in primary care a lot of calls after calls after hours for patients that think they have Covid. But it could be a bazillion other viruses. They could be testing positive for Covid and or have multiple viruses. It's just, it's kind of nuts. And the kids are really taking a brunt of it this time, which is really sad, but really nice side effect.

Of the whole let's stay home, let's stay six feet away from each other, let's wear masks, let's wash our hands thing. The last few years has been much less flu and rsv. Well, it's back. It's still an important, there's still important pathogens in our lives, it turns out. So yeah, it makes for, you know, busy shifts in the ED for sure. But that's what I've been up to lately.

I'm surprised we didn't pick up any viruses in Jamaica, actually. Did anybody get sick?

Nope, I don't think anybody did. Yeah, that's a good, good, good intro. We Just got back from Jamaica. It was the first WCI retreat we've ever done. Took all the staff members, WCI and their partners and went to Jamaica, and I had a meeting down there. Yep, it was a meeting, a very important meeting. It was mandatory. Everybody had to go to Jamaica to go to this meeting.

I am so glad I was at that productive meeting.

And we did a lot of team building exercises there at this, you know, five or six day meeting we attended. But it was. It was a good time, and it was actually really important for team building. And one of the great things about working here is being able to do stuff like that. And that's the fun thing about having your own company, is you get to run it the way you want. And so we did. It was a good time.

Oh, my gosh. So fun.

We have something to ask you guys for. We have a favor to ask. We're doing our survey, our annual survey. And WCI is primarily driven by you, particularly the podcast. You've noticed what we do on the podcast is almost entirely listener driven. But everything we do at wci, we're trying to serve you. We really are trying to help you become more financially literate, more financially disciplined, et cetera. And so we have this survey for you to help us to do that better. At whitecoatinvestor.com survey, you can give us the feedback on what you like, what you don't like, what you'd like to see, what we're doing bad, et cetera. We want that information. So if you will take a few minutes and fill out that survey, we would really appreciate it. In fact, we'd appreciate it so much, we're going to bribe you to take it. We're going to give 20 people who take the survey a T shirt. And one person who takes the survey will be. I mean, everyone gets entered into this random drawing, but one person will get an online course of their choice. So we'd appreciate you spending a few minutes filling out that survey and enter the lottery for these prizes. All right, let's get into some content. It's one of my favorite times of year. Uh, we're recording this. What is it, the 19th? So by the time you hear this, when are they going to hear this, Megan? January. So this doesn't run to, like, the first week of January, but I'm thinking a lot about charity as we record it. And we're going to be talking a lot about charity on this episode. Lots of questions that have come out with it, but we tend to backload our charitable giving for December just because it tends to be more convenient for us. Especially nowadays we've got to move money around a few places using a donor advised fund, etc. So we end up doing almost all of our giving in December. And so charity's very much been on my mind. We had our meeting with our kids a couple of weeks ago and we actually did the physical allocating from the DAF literally yesterday. This was Katie's first time putting in all the orders to distribute that money from the donor advised fund. And so we just got done doing a whole bunch of charitable giving. We also have we're going to let the White Coat Investor audience help with our charitable giving this year as well. This post actually doesn't run for five days after we record this, but it will have run a couple of weeks ago by the time you hear this on the podcast. We're basically letting podcast or blog readers answer a poll to decide, you know, some of the charities that we're going to support this year. So look for that it's on the 24th is when it's going to run on the blog. You can go back and take a look at that post by the time you hear this podcast. But let's get into some of your questions about charitable giving. I think our first one here is from Chris. Let's take a listen to him.

Hi Jim, this is Chris from Oregon. My question is about charitable gift annuities. The way I understand them is that they provide smaller payouts compared to a standard income annuity, since a portion is going to charity, but they also allow for a portion of your premium to be considered a charitable tax deduction. If part of my financial plan at retirement calls for me to put some portion of my nest egg into an income annuity, and it also calls for me to donate to charity, then would it make sense to accomplish both these goals by utilizing a charitable gift annuity? Or would it make more sense to separately purchase a single premium immediate annuity, for example, and separately donate the money to charity, for example by donating appreciated shares in my taxable account or by donating a portion of my required minimum distribution? I guess some of the answer depends on if I want to maximize leftover money to my heirs or if I end up having a complicated estate. But I'm trying to get a more general sense of the charitable gift annuity. Do these products make sense or are they creating unnecessary complexity and expense? Thanks for all your help over the years. I appreciate your answer.

Okay, so let me just define what a charitable gift Annuity is for anyone that doesn't know. Basically, a charitable gift annuity is where a donor signs an annuity agreement with a charity, a single charity, and makes a lump sum donation and then takes a partial deduction for it. The charity then invests that lump sum in an investment account and the donor then receives payments on a fixed schedule with a fixed interest rate for the rest of their lives. According to the annuity agreement, when the donor passes, the charity then receives the balance of the invested funds upon the donor's death. So basically this is a good way to get a little bit of income in retirement and make that donation. The downside of this is that it's a contract with one charity and it's not a trust. So that's, you know, you're basically married to just donating to that one charity. The interest amount is fixed and it doesn't adjust for inflation. And annuity rates, basically, they vary with the age of the donor. So if you're younger, when you purchase this annuity, you might get a lower interest rate on your annuity just because you have a longer time that they have to pay out. This is in comparison to a charitable remainder trust. A charitable remainder trust basically is another large donation, but this time you make it to an irrevocable trust. And that trust can then set up, receive an income stream or set up an income stream for you after your death. Any remaining funds in the charitable remainder trust are then distributed to the charity or charities of your choice. It can be multiple or you can pair this with a donor advised fund and that way you can continue to give out of, or your beneficiaries can continue to give out of that fund after your passing.

Yeah, there are so many options here. But you're absolutely right that the people for whom these work really well is people like you, Chris. People who want to give money to charity and want some sort of an income stream for them or foreign heir, you know, like a spendthrift heir kind of situation. That's the people who look at these sorts of things and there's kind of. The two big categories are trusts and annuities. Annuities are typically done with smaller amounts of money. If you're only doing this with a few hundred thousand dollars, you might be more likely to use an annuity. If you're doing it with a few million, you might be more likely to use a trust. But there's like a gazillion ways to set these things up. All of them, however, are essentially a split interest gift. Part of it's going to either you or your heirs, and part of it is going to the charity. And so you get a donation deduction, you know, a charitable donation deduction essentially for the portion that's going to the charity. And. But it's possible for this to work out better than not using this trust. Better than just giving some money to charity and buying an annuity. This can work out better. So if you have both of those goals in your life, it is worth looking at these things. And they're abbreviated krats, cruts, klats and kluts. Basically, there are unit trusts and there are annuity trusts. The UT stands for a unitrust. And with a unitrust, the income payments vary with how well the investments in the trust are doing. Think of it like a variable annuity. With an annuity trust, the payments are fixed. And so that's the difference between a unit trust and an annuity trust. The UT versus the AT portion. And then the other part of these trusts is whether they're leads, a lead trust or remainder trust. And you know, cause the C always stands for charity, right? But the L stands for lead and R stands for remainder. So klutz and klats versus cruts and kratts. And that refers. That letter refers to what the charity gets. So if the charity is getting the money up front and then the charity is giving you the annuity or giving your heirs the annuity, that's a lead trust. If the charity gets what's left in the end, that's a remainder trust. So lots of different ways you can set this up. This is not a do it yourself project, right? This is something you go and see an estate planning attorney in your state for to set this up. If this is something you're interested in doing. The charitable annuity, as Disha mentioned, you know, one charity is generally who's getting that. It's usually a smaller amount. It's always fixed. I think it's always fixed. That may not actually be true. There are other options too. I mean, you can just give the money to charity directly. You can put it in a DAF and give it to charity. You can start a foundation. You can start a charitable foundation and then give to the charity. From there you can get charitable life insurance. So what they do is you're giving the premium each year to a charity and they are buying life insurance on you. So when you die, they get a whole bunch of money. I mean, there's a million ways to solve this problem. It's just not straightforward at All. So you've really got to consider your options. But I think this is something you ought to consider. If you're considering buying and annuitizing some of your portfolio and you want to give some money to charity, you should be looking at all these options and look at them carefully because it's a big decision. It's usually a lot of money you're putting into something like this, and you ought to take your time with the decision. What was this question specifically? Do you remember?

Yeah, I think he asked, you know, should he do this instead of just a regular annuity? So by definition, you're sharing your profits with the charity. So you're not going to get as much of a return from doing an annuity, a charitable annuity, than you would from a regular annuity. But in this format, you're combining two giving and, you know, having a set amount of income in retirement. So I guess it really depends on what your goals are and how much you actually want to donate and how much you need to live on.

Yeah, that's a good point. The general rule of charity, right, is you do not come out ahead for giving money to charity.

Right?

Give the money to charity anyway. You ought to be careful how you do it because it allows you to either have more money afterward or to give more to the charity, but you don't end up with more than you would otherwise have. But in your situation, I think I'd look pretty carefully at these charitable trusts, charitable annuities, because you have both the goal of a stream of income and a desire to give to charity. That's who these are designed for. So I think it's definitely worth looking into there. He mentioned something about QCDs, qualified charitable distributions. For those who don't know what these are, these are something you give to a charity in lieu of your required minimum distributions. Now, due to the weird way RMD laws have changed in recent years, you can start doing qualified charitable distributions at age 70 and a half, even though you don't have to start taking RMDs until 72. But basically you take your RMD and give it to charity, and then you don't have to pay taxes on the rmd and you can still itemize your deduction, or you can still take the standard deductions. You don't have to itemize like you normally would for big charitable gifts.

Oh, that sounds nice.

Real benefit there. If you are 72 plus, you have an IRA, you have to take RMDs from and you give to charity. This is the best way to give to charity. You should give to charity using qualified charitable distributions every year. I help my parents to do that each year. And it's really a pretty slick trick because then especially if you're, you know, if you have tons of deductions, fine. But a lot of times in retirement people don't aren't paying a lot of taxes, especially if they're in tax free state like my parents are. They may not be donating all that much to charity. They often have the mortgage paid off, so there's no mortgage interest. They may not be in that expensive of a house, so the property taxes might not be much. In short, they may be better off taking the standard deduction. 90% plus of Americans take the standard deduction, but with a QCD, you can still essentially get a charitable donation deduction while still taking the standard deduction. So it's really a slick trick. Cool. All right, more charity questions. We got another one here. This one's from aj I think this is more of a what should policy be question so we can debate that a little bit. I'm not sure this one's going to have a, a right answer, but let's take a listen to the question.

Hey Jim, thanks for all you do. This is AJ from Texas. I've heard you talk about charitable giving and picking charities based on their mission, transparency and low overhead. I have previously donated a 10% tithe to my church. I have recently come to realize that there is no transparency in how my church uses this money. And there are mounting allegations that they are hoarding money in equity deals, stock market and real estate. Do you give churches a pass on your criteria when it comes to charitable giving? Do you think churches should be forced to be transparent like other nonprofit groups struggling with this issue? Thanks for your input.

Great question. I don't know that I know the answer to that. Tisha, what are your thoughts?

From what I know, most churches don't have to file to become a 501, but they can. And when they do, they do have to file form 990 with the IRS, which would that and then they can make that public. So they can make it more transparent when they do become a 5oC3 and they kind of have to, you know, report what they're doing to the irs. But they don't have to do that, I guess, if they don't want to. So that would be a very good question to ask when you are joining a church and donating and tithing to them, I think, is whether they do make their investments. Public.

Yeah. I guess the bottom line is, you know, if I were an organization and I had the option not to file something like that, I probably wouldn't file it. So I don't know that I blame them for not filing that. I mean, all it does is open you up to criticism for how we're using the money because obviously not everybody's going to agree with how the money should be used. So I don't know that I'd file it if I didn't have to.

Yeah, I mean, they are required to file it if their gross receipts are greater than 200,000 in the year, so I should have mentioned that. Or their total assets are greater than 500,000 for the year.

That's going to be. Most big churches are going to have. Yeah, but I don't know that there's a lot of information. I mean, I'm looking at this form. It's a few pages. It's 12 pages on it, but most of it's kind of balance sheet stuff. I don't know. Form 990, you said, does have to. If churches do have to fill it.

Out, if they meet those income criteria, they have to fill it out and then they can choose to make it public, is what I was reading. They don't have to.

Oh, they don't have to. They just have to file it with the irs.

Right.

Same basic answer then to that. Should they? Well, I don't know. I don't know that I would if I were in charge of the church now. But it's up to you whether you want to give to that church. I mean, presumably you're there because you believe in what they're doing. Doing, and you trust the leaders, I guess. If that's not the case, why are you giving them tithe anyway? You know, so that's more of a philosophical religious question, I suppose, than it is really a financial question. So it's really your call. I know a few people that have become disillusioned with their religion or their church, and they still feel strongly about paying a tithe and they've chosen to. To give the tithe to other charities that they feel like they support more than the church itself. Whether that counts in God's eyes, I'll leave between you and God. But I know a few people that have chosen to do that sort of a thing with their tithe money. But this is far more religious question than it is a financial question. So I don't know if there's any one right answer to that.

Yeah, I don't really want to get into the muck of what we believe religiously. But I will say I don't, you know, belong to a church because of.

Concerns like this, politics and religion. You gotta love them, right? We get into both of them here at the White Coat Investor Podcast.

It's always juicy.

Yeah. Good luck with your decision. I do know that, you know, a lot of big churches, their finances come out anyway eventually, you know, somebody files suit and it ends up in the lawsuit information, and then the press picks it up. And so you can kind of know where the money is, where the money's going. But whether you would make those exact same decisions that the church has made about what to do with the money, I guess I'll leave up to you. You know, some big mega churches might be buying private jets and have them sitting out on the tarmac behind the church. Others may be, you know, using it for. For various investments and then giving from those investments. There's quite a bit of variation there. All right, before we get into our next question, I wanted to bring up an interview I did a few days ago with a doc who came to wcicon last year, is going to be coming back next year. Let's get her on the line here. All right. We have a special guest today on the White Coat Investor podcast. I'm here talking with Yemi. Yemi's a sports medicine document down in sunny LA. And as we record this in mid December, it's 19 degrees where I am here in Utah and 66 where she is in California. Welcome to the podcast, Yemi.

Thanks so much for having me, Jim. It's great to be here this morning.

Yeah, it is awesome. And, you know, we talk a lot about California on the podcast and how it's a difficult place to build wealth for doctors and so on and so forth. But you know what? There are benefits of living there. And one of those benefits, I think is on display today. You do get something for the sunshine tax that you pay in California. And today is one of those days.

Yeah, definitely.

You know, another great opportunity to get out of the cold temperatures, if you live someplace cold like I do, is to come to the Physician Wellness and Financial literacy conference, or WCICON. And for 2023, that's March 1st, 1st through 4th, in sunny Phoenix, Arizona, which will be dramatically warmer than Salt Lake or Wisconsin or Maine or wherever you're at right now. Yemi is an alumni of this conference. She attended last year at WC Icon 22 and is planning to come back this year. We thought we'd Talk with her for a few minutes about her experience and what she liked and why she's coming back this year. And so. So tell us about your. Your trip to the conference last year, Yemi.

Yeah. So where do I start? So, yeah, I flew in California to Phoenix. Very short airline trip. But just to even start off, how can you deny, like, the JW Marriott Resort was absolutely beautiful. It was a great conference venue. And so, yeah, I had a really great time at the conference last year. I actually kicked off my conference exchange experience doing kind of the Recognizing Burnout and Preventing Burnout interactive session with Dyke Drummond. And that was just a great way to kick off the conference. It was very interactive. I got to meet a lot of colleagues and network with them and chat with them about kind of their experiences in medicine. And we all just kind of worked together, just talking about ways to prevent burnout and create that life and kind of career balance, that work life balance that we're all trying to achieve. Achieve. So that was a great way to kick off the conference.

Awesome. And that was. That was even before the opening reception last year, I think, is how I.

Came a little early.

Yeah, well, it's not a bad place to be early. As you mentioned, it is a great facility. That's one of the wonderful things about it. You know, over the years, the feedback we've gotten from attendees is, hey, make it nice. We want to go to a luxury place where a lot of times we're paying with CME dollars, we're writing it off. We want to do something nice. This is our time away from work. And if the point is wellness, let's go to a nice luxurious place. And the JW Marriott there, just north of Scottsdale, is technically in Phoenix, but it's pretty much Scottsdale certainly qualifies. What else did you enjoy about the conference?

So really just the networking. I was just so inspired by all the different individuals that I met along the way. Physicians in a lot of various practices, and even I met some dentists and kind of oral maxillofacial surgeons. So people from a lot of different backgrounds. But it was just so inspiring to see people passionate about their careers in medicine and also their careers outside of medicine. I actually registered for kind of the premium registration, and so it gave me access to a couple of different networking opportunities. And I met a group of colleagues who were really passionate about real estate, and they were all actually partners in real estate investing, and they kind of shared to me their interests and they started talking about passive real estate investing and so actually walked Away from the conference with an interest in kind of pursuing more knowledge on passive real estate investing. So that's kind of one of the things that I came away with from the conference was just all the different inspiring individuals that I met. Everyone was so down to earth. I remember like meeting individuals who had written books that I had read and everyone just was so nice and just passionate about what they were doing. So I was very taken aback how just approachable and inspiring and kind everybody was.

Yeah, it's a pretty incredible community, isn't it?

It is, absolutely. Absolutely.

How about the content? How did you decide to interact with the content? I mean, there's so many ways, whether it's after the conference via the online course, or virtually or attending in person. How did you choose to digest the content at the conference?

Yeah, so I did a little bit of a hybrid so that I could facilitate my wellness. So most of the sessions I went to were in person, but it was nice to have the ability to do some of the sessions online or virtually if I felt like I wanted to sleep in a little bit. So I did consume some of the content virtually. And then I also went back and kind of revisited some of the content after the conference just to kind of brush up on some topics that I either missed or, you know, if I didn't go to a session, I said, oh, you know, I kind of want to check it out after the conference. So it was nice to have the availability to consume some of the amazing content after leaving the conference. So that was a great bonus.

You know, one of the things I really like about the conference, and it's my. The conference last year is my favorite conference I've ever been to. You know, I mean, I'm a little bit biased, obviously, but it's my favorite conference. And part of what I liked about it is we kind of knocked off at, I don't know what it was, 3:30 or 4:00 clock in the afternoon and went and did stuff. You know, wellness activities is what we call them. Did you attend any of those wellness activities and which ones and did you enjoy them?

Yeah, so I actually did not. I actually brought my significant other with me, so I feel like my wellness was just kind of hanging out with him. After the conference, I wanted to get up. I think There was a 5k race and I think I wanted to enjoy that, but I didn't make it. But there were a lot of, I think, opportunities to golf and kind of do activities on the resort grounds. So I didn't actually do that. But I think next year when I'm there, I'd actually like to enjoy a spa. I think there's a spa there. So I think I'm going to enjoy a massage there in the spa. So I think I'll do that next year.

Yeah, there's definitely a spa there. There's no doubt about that. Awesome. So what made you decide that this was such a good experience? I want to do it again and come back in 2023.

Yeah. So I think first and foremost just the resort. I mean, I think like you mentioned, it's such a luxurious experience. It's kind of a nice opportunity to kind of take a couple days away from work just to kind of be in a kind of luxurious space. So that's one and two. Just kind of interacting with that content again. I've just left the conference so motivated and inspired by the content individuals and just a way to kind of get that energy up again. I think every year it's kind of nice to just actually go to a medical conference that you're interested in going to. I feel like it's so easy in our careers to go to a research conference or go to a conference for one of our professional organizations and feel obligated to go, but this is a conference that I actually feel I'm excited to go to. I want to learn something new. I actually left the conference sitting in the airport coming up with a list of short term and long term goals. And part of me is just inspired to get back there and see what did I achieve versus, you know, what do I want to kind of go back to and still kind of achieve in the future. And yeah, just, just really just learn something new and just get inspired and motivated again to kind of build that life and that career that I'm, you know, that I, that I want, that I feel like I'll thrive in.

Yeah, that's awesome. You know, one of the things you mentioned, the fact that there's other specialties there for most of us, this is the first medical conference we've gone to maybe ever, maybe since medical school, where there are people from other specialties there. Yeah, someone. So often it's, we go to our, you know, national conference, a regional conference. It's just our specialty. And it's really pretty cool to be sitting there with an OB on one side and with a, you know, orthopedist on the other side, a pediatrician ahead of you and a dentist behind you. You just don't do that very often. And it's very cool to be able to compare and contrast and get ideas from other people that you would never run into anywhere else in life and. And apply them in your own life. That's been one of my favorite parts of the conference as well.

Yeah, absolutely.

So if someone's sitting on the fence wondering if they should go, what. What tip do you have for them?

I would say. Yeah. I mean, I think one thing I spoke to previously was that this was one of the first conferences where I just. It felt like it wasn't that I had to go, it's that I wanted to go. I think you'll find that the content is very inspiring and motivating. You'll meet a friend, someone that you really want to stay in touch with. Yeah, I would say just push yourself. I mean, I think sometimes it's a little daunting to think about finances and to think about creating the career or the practice that you so want. And this is not about just, like, medical jargon and scientific knowledge. This is about life and lifestyle and seeing yourself in the person next to you and getting motivated by something that they're doing or just learning something new. I think. Yeah. I think sometimes we get really bogged down in our careers, and I think that we also need to think about life outside of our careers and some of the choices that we can make to enhance that life both within and outside of our careers. So do it. I think it's. You won't. You won't be. You won't be disappointed.

Awesome. Well, I appreciate that. If you are interested in coming to the Physician Wellness and Financial Literacy Conference, you can still come. You can still come in person. You can attend virtually. If that's not a possibility for you, you can sign up@wcievents.com Yemi, thank you so much for coming on the podcast and for sharing your experience and for coming to the conference and just for what you do every day. It's important work. So thank you very much.

Thank you. Thank you so much for having me. And, Jim, thank you so much for what you do. I'm just very pleased to be here and be a part of this. Thank you.

All right. That was great hearing from her, man. I had a great time at the conference last year. I know you did as well, Disha. Even though you, like me, were working the whole time, it was busy from people who enjoy that enough to be coming back again this next year. All right, let's take our next question from Mary. This one is about donating appreciated stock. And this is a subject near and dear to my Heart. So let's take a listen to that. Is it better tax wise to donate appreciated stock to charity or to use.

It to offset capital losses?

All right, short and sweet. Great question, Mary.

I'll let you take that one. No, I'll let you take that one. It's your favorite topic.

Yes. The answer is yes. Donate appreciated stock to charity instead of cash. If you're going to donate to charity anyway, donate appreciated stock. What do you mean? Offset losses? You don't want to offset losses. Use losses to offset gains. Better not to have the gains. And when you donate to charity, you don't have the gains. So if you've owned something for at least a year and it has appreciated and you're going to give money to the charity anyway, just give the appreciated stock or appreciated mutual fund shares directly to the charity. If you want to make it really easy, use a donor advised fund, okay? Like if you're a Vanguard, you can open a Vanguard charitable account. Same thing with Fidelity. If you're a Fidelity, they've got their own DAF there. You move it from your brokerage account into the charitable account they liquidated a few days later. You get the full charitable deduction for the full value of that publicly traded security that you donated on the day you donated it. That's your charitable deduction. But nobody pays the capital gains taxes. You don't pay them, the charity doesn't pay them. It's a great way to donate to charity. So yes, you should donate appreciated shares if you're going to give to charity anyway. Now, if you're not going to give to charity, obviously you're not going to come out richer by giving to charity. But if you're going to give to charity anyway, use appreciated stock anytime you can instead of cash. And what that does is you're continually flushing out the capital gains from your portfolio. And so the basis of your portfolio goes up and up and up over the years. And that way when you actually do have to sell some shares in order to spend that money, you won't have to pay very much in taxes on because your basis will be so close to the value compared to if you never sold shares. Obviously you should tax less harvest when you can as well. This is great. When you do have capital gains, you can use those losses against your capital gains. You can use up to $3,000 a year of them against your ordinary income. But you don't want to burn those capital losses for nothing that you don't have to use them for already save them up. You'll use them eventually.

Jim, is there a minimum that you can put into a daf, like, to start it?

Well, each DAF has its own minimum. Like Vanguards is fairly high, actually. I think it's 25 grand.

Oh, wow.

And they only allow a minimum grant to a charity of $500. So if you don't want to give $500 plus at a time and you don't have 25 grand to put in there, Vanguard is not your daft.

Okay.

You probably want to look at Fidelity. I think fidelity, it's like 5,000 minimum to open it and like $50 per donation, so. And it's not that hard to transfer money from a Vanguard brokerage to a Fidelity Daft. In fact, you could even put it into the Vanguard Daft and then have the Vanguard DAF make a donation to the Fidelity daap if you want. There's lots of different options there. Since they're all, you know, registered charity. You can go from one to the other. Yeah. If you're. If you're just trying to do small amounts. Vanguard may not be the best one.

Good to know.

One of the. One of the cheapest ones as far as expense ratios if you're leaving money in there long term. But, you know, they have relatively high minimums. All right, tell us about the quote of the day today.

All right. It's from Robert G. Allen. He said, how many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.

You gotta take some risk. Unless you're willing to save like 50% of your money for your whole career, you gotta take some risk with your investments.

Right, That's. I mean, with the current inflationary environment, I mean, it's very hard to keep up with that kind of inflation long term. So you gotta invest, Gotta take some risk. Totally agree.

Do you know who Bob Allen is, this Robert G. Allen guy?

I feel like I should. Maybe I should Google it real fast.

It's been a long time since he was kind of out there in the personal finance literature, like 80s 90s kind of guy. He wrote multiple streams of income. You know, he was. I don't know that I endorse everything he ever wrote or said for sure. But he was based out of Utah and this was kind of his big idea is this idea of multiple streams of income, which we all talk about now, but it kind of came from this guy.

Cool.

I think we're switching subjects. Are we done with our charitable questions? I think we are.

Yeah. We're going to bonds. Bonds and bonds, more bonds to say.

About charity before we change topics.

I think it's a fabulous thing to do.

I always think about, you know, the five money activities, right? Earning, saving, investing, spending, giving, and I try to become better at each of them. But what a lot of people don't realize is giving is work too. I mean, you got to make sure you're given where your money is going to do the most good. That's to friends or family or acquaintances or registered charities or churches, like the question we had earlier. And if you don't spend any time with it, you're probably not going to do it very well. So it's a great problem to have. But I I encourage you to put just as much effort into it as you put into deciding on and planning your next vacation to make sure you do it right.

I love that.

All right, let's do bond funds. Which account to put bond funds into? It's an anonymous question on the Speak pipe. Let's listen to it.

Hi Jim, I'm having trouble figuring out which account to put my bond funds into. Either my tax protected retirement accounts or my taxable account. I know you came out with a few different blog posts. One particular a while back that talks about which bond funds are reasonable and in some of those you touch on the benefits of having them in one account versus the other. But at the end of the day I'm still sort of unsure about which one to put them in, especially as time goes on. If I have a pretty large allocation in bonds as I get older and you know, more and more percent of my portfolio in a taxable account, I don't want to end up filling my my retirement accounts with only bond funds. I was curious if it was a reasonable thing to sort of divide up your bond allocation between your taxable and retirement accounts or what other way to do it. It seems like I'm sort of mostly taking my risk with stocks as opposed to bonds. I don't know if that helps, but any advice would be appreciated.

Thanks. Portfolio Construction Asset location your favorite the questions with no right answers right? We can talk about this stuff all day. If there's five blog posts on the blog about this and they're all 3,000 words long talking about the pros and cons, right? There's clearly not a right answer to the question. There's many ways to do this. Couple of things to keep in mind. 1. There is a benefit to having your tax protected to taxable ratio grow, right? So more of your money is in tax protected accounts than is in your taxable account. The way you do that is by having high returning assets in the tax protected accounts, whether that are tax deferred or whether they're tax free, AKA traditional and Roth. That's a good thing. So that factor would lead you to put higher returning assets, AKA stocks into your tax protected accounts. The other factor you think about is tax efficiency, right? How much of your return is going to be income each year, how is that income going to be taxed? And in that respect, a typical taxable bond, a Treasury or a corporate bond, a mortgage backed bond, those sorts of things are not super tax efficient. Right? They pay out basically their entire return each year in income and that income's taxed at ordinary income tax rates. Sure, Treasuries avoid state and local taxes, but basically your ordinary income tax rates. So bonds are not tax efficient vehicles. So it turns out at risk, really low interest rates, it doesn't matter all that much. As interest rates rise like they have in the last year, bonds and tax protected starts being a better and better strategy. However, there's always the option to use muni bonds and more and more of my accounts also becoming taxable like yours over the year, over the years. And so more and more of my bonds are ending up in a Vanguard muni bond fund because that's tax free, at least federally tax free. Income that those bonds pay out. Now, obviously they pay out a lower rate than your regular taxable corporates and Treasuries. But if you're in a high tax bracket, you may still come out ahead like we typically do by using a muni bond fund. So there's not a right answer there. But as interest rates rise, it becomes more and more beneficial to put those bonds into your tax protected account. Your strategy of splitting the difference I think is perfectly acceptable. I mean ours are kind of split as well. You know, some of our tips are intexible, some are intact protected. All of our I bonds are obviously intaxable. Our G fund is obviously intax protected. Our muni bonds, they're all intaxable. So you know, that's where I'm at. I got a bunch of my bonds intaxable and some still in tax protected. So I can't criticize you if that's what you want to do, because that's what I'm doing right now. But back in the day when my taxable account was perhaps 10% of my portfolio, I didn't have any bonds in it. All the bonds were in tax protected accounts then. So it's a Classic portfolio construction dilemma of when do you put bonds and taxable. And it sounds like you're kind of at that point where it's time to have at least some of your bonds in a taxable account.

I live in New York, so we have a New York muni bond, so I fund at Vanguard, so I just invest in that in my stuff, in my brokerage account as well, along with the, you know, the stock funds.

Yeah, yeah. I mean, when you live in New York, you got to do whatever you can.

Exactly. Location dependent.

Especially if you're in the city. Right. I mean, that's.

Right.

That you're in a high tax state to start with. And then it's like you're in a high tax state within a high tax state.

Yeah, that's what, that's why they moved up so much.

All of you doctors in Manhattan, thank you for being there to serve the people, even though it is not, you know, good for you financially.

It's a fabulous city, though. You can't blame them.

Yeah. Well, it's, you know, it's like I talked to Yemi earlier, Right. And she's in New York or not New York, she's in California and, you know, pays the sunshine tax for sure. But you know what she's benefiting from this week? The sunshine 19 degrees here in Salt Lake. And. And it's, you know, 60s and 70s in California. So there are some upsides to living in these high tax places and some pretty cool things about being in Manhattan. Even if I can't stand to be there for more than about three days at a time, it really is a pretty incredible place.

Agreed.

Okay, let's. Let's take a question from Nate. Hello.

I'm a physician in California in my early 50s. We have our house almost paid off and anticipate doing so this year. My idea was to take the money that we normally would pay our mortgage with, about $3,500 a month and invest that, figuring we haven't missed it for a long time and we're used to paying that, so we might as well invest it. My idea was to invest the money in either California municipal bonds or a California municipal bond fund, since the money is free from both state and federal taxes and the tax equivalent yield would be pretty good, and the money would be quite safe in those investments. What are your thoughts on that? The idea is that I am saving this money outside of my pension because I would like to be able to access it earlier if I choose to retire, cut back, or take a sabbatical thank you very much.

Yeah, sounds like, I mean, if you want a safe investment, sounds like a good, safe investment to invest in. What do you think, Jim?

Yeah, for sure. I mean, you're in California. Choose a California. There's lots of California mini bonds and you're paying a high state tax rate. If it doesn't make sense in California, it doesn't make sense anywhere to use a state specific muni bond fund. So I wouldn't lose any sleep at all about investing in that. Now, I'm not entirely clear, and I don't think that Nate is either entirely clear on what the purpose of this money is, because at the end he rattled off two or three different things he could use this for. Right. Is this money you're going to spend somehow different from your retirement money? You know, this is money you're going to use to bridge until you get a pension or to pay for three or four years of early retirement or something that you're somehow treating as a different bucket than your overall retirement nest egg. And if so, you know, fine, think of it separately, have its own asset allocation. But if this is just going to be part of your retirement nest egg, well, you should look at your overall investing plan for your retirement money and then ask yourself, well, I've got this $3,500 or $3,800 or whatever it was that was going toward the mortgage and now what should I use it for? Well, it doesn't matter that before it went to the mortgage, the money doesn't care what it was going to be spent on. It's just like any other savings you have. It's just like any other windfall you have. And it ought to go into your written investing plan according to how you invest all your money. It doesn't necessarily need to go someplace unique like into muni bonds if that's not what your plan is calling for already. So I would spend some time thinking about what this money's really for, Nate, before you decide how to invest it.

I think that's such an important point, especially in a, in a market like this where, you know, bond buying goes up when the market is down. But really, if you were actually looking at your, your portfolio and your written investment plan, most, most people would, should, should be buying stocks right now, not bonds, because your stocks are totally falling in value. So that your written investment plan should lead you to buy something that's down. So I think that's really an important reminder for us to all look at a written financial plan instead of just going for whatever is popular at the moment.

Yeah. Of course, depending on what kind of bonds you're investing in, those might be.

Down, maybe not quite asterisk. It's true.

Terrible year for most bond fund investors that people are calling it the death of the 6040 portfolio. It kind of reminds me of that was a Newsweek or something in like 1981 or 1982, they ran this headline, the death of stocks. You know, this cover is famous, of course, because it was the, it was the mark of the beginning of the longest bull run in stocks that we've ever had in history. And so, you know, obviously buying bonds now, even the ones that kind of got hammered in 2022, you're getting a much better investment than you would have gotten a year ago buying those bonds. But there are some bonds that did just fine this year. If you stayed really short term, your bonds aren't down all that much. I bonds are way up this year. And so it kind of depends on what bonds you own. Hopefully didn't own long term Treasuries because they got hammered over the course of 2022 as interest rates went up. But hopefully they'll provide a better return going forward from here. All right, for those of you who aren't aware, we have a free real estate masterclass. If you're interested in learning a few pearls about real estate and kind of getting a little bit of an intro totally for free to our longer real estate course, the no hype real estate investing course. You can take this free masterclass and it's available at any time at your convenience. White coat investor.com re masterclass. Be sure to check that out. All right, we've talked about some nominal bonds, we've talked about some muni bonds. I guess now we're going to talk about TIPS and I bonds, our favorite inflation indexed bonds. So let's take this question from an Anonymous speaker.

Hi, Dr. Dali.

It's anonymous in the Pacific Northwest. Thanks for continuing to answer questions from the white coat community to empower us to take control of our finances now that interest rates are approaching more historically normal levels. There's a lot of interest in bonds. In particular, there's been a lot of I bond hysteria, but I haven't heard people talk much about tips. Five year tips auctioned in October, had a coupon rate of 1.625% and will likely become more attractive as the Fed continues to increase rates. Could you talk about TIPS versus I bonds as well as give your thoughts on how much of the fixed income portion of our Asset allocation we should consider devoting to individual bonds versus bond funds. Thanks.

Okay, so I bonds are treasury bonds that pay a fixed rate of interest as well as another layer of interest that varies with the current inflation rate as measured by the consumer price index. So that inflation adjustment is made twice a year and that I bond doesn't actually yield any income initially. You only get the income from it when you cash it out. And you can do that after 12 months of owning it. And if you do it within five years of owning it, you forfeit the last three months of interest. So that's an I bond. A TIPS is different. TIPS principal values are adjusted to incorporate for the current inflation rate, whereas I bonds receive an adjustment in their interest rates to reflect inflation. So TIPS are adjusting the principal which then, you know, varies your interest payments indirectly. Tips can be bought by the from the government@treasurydirect.com but they can also be bought via a brokerage firm or you can also buy a TIPS fund or an etf. So the advantage of TIPS is basically you don't have any purchase constraints. You can buy it at a brokerage, you don't have to go to Treasury Direct, you can sell it on a secondary market which makes it a little bit more liquid. But you do get semi annual interest payments from tips. So if you. So actually it can be an advantage if you're actually looking for income this advantages that you're going to have to pay tax on those income payments as well as inflation adjusted payments and you're going to have higher volatility due to the trading on the secondary market.

Yeah, that's exactly right. Other than it's not treasurydirect.com, it's treasurydirect.gov because.

Oh, sorry. Thank you.

I tried to see what was on treasurydirect.com I don't think there is a treasurydirect.com but I was curious imitator trying to take people's treasury money there.

Right, sorry. Yeah, that's a really good correction. Thank you so much for making that clear.

But yeah, tips. TIPS I bonds, I love them. I feel like I talk about them all the time. At the beginning of the year I bonds were an awesome investment and then I think it was May, they got even better. I mean for a portion of this year I bonds were paying like 9.5% as a safe investment. I mean that's incredible. That's the best I bonds have ever been and they're not quite as good right now as they were then. But they're still paying like 6 something because you get this fixed rate plus the inflation adjustment this year. Inflation was really high. And so they paid really, really well. And the cool thing about them, I mean, there's other cool things, but one cool thing about them is kind of like the TSPG fund, you never lose principal. Kind of like a money market fund that way, right? When rates rise, that's usually a bad thing for bonds, you know, at least in the short term because the principal goes down. But that's not the case for, you know, a money market fund. That's not the case for a savings account. That's not the case for the TSPG fund. That's not the case for I bonds. It's a good thing when rates go up there for these sorts of investments that actually just is all good for them and their return. So I like both I bonds. I like, I like both I bonds and TIPS. I own both of them. I own TIPS both in mutual fund or ETF and directly at TreasuryDirect. When I tend to taxable, I tend to buy them individual tips, which, you know, obviously, you know, since they're all guaranteed by the US Government, there's not like a benefit of diversify and there's not like there's multiple US Governments. It's basically the same whether you buy them directly or whether you buy them in a fund. You're just getting some additional liquidity and, you know, some, you know, ease of use, mostly by using a fund if you're interested in that. Like if you want to buy them in your 401k, you're probably not going to be able to buy them, you know, individual tips. You're probably going to have to use a TIPS fund if you want to do that. But either one is fine. There's not a right or wrong answer there. The overall question I like that you asked is how do you decide how much of your bonds to index to inflation and how much do you not index to inflation? Because obviously when inflation is lower than expected, the nominal bonds do better. When inflation is higher than expected, the inflation index bonds do better. And so I think it's good to have both. I've always had both. I was never sure exactly how to split between them, so I just did it. 50, 50. And we've always had 50% of our bonds in inflation index bonds and the other 50% in some sort of nominal bond. Although for a lot of that it's just been in the, in the TSPG fund that I had access to since I was in the military. How about you, Isha? Do you have any inflation index bonds? Have you chosen to split those in some sort of percentage? What's your mix of nominal to inflation index bonds?

Yeah, honestly, I don't think I was that savvy. I don't think I have purchased any tips in our retirement accounts as far as I can. If I remember, on top of my head, we thought about the I bonds, but it just wasn't in our plan at the time. So we didn't do it. But we were actually taking our money, saving it for a backyard renovation which hasn't happened. So I really wish I'd bought the Ibond at this point, but it's really hard to find contract.

Turns out they're not a terrible short term investment as long as you're going to hold them for at least a year.

Yeah, we were hoping to do it in six months and it didn't happen. So at this point it would have been better if we just invested, but. Oh well. So no, but I will.

Some people use them as their emergency fund. Now obviously you can't do it in the first year because you can't take the money back out, but after the first year you can take the money out. The big downside of I bonds is you can only buy 10 grand a piece of them. Now you can buy 10 for you and 10 for your spouse and 10 for your LLC and 10 for your trust and that sort of thing. But it's kind of unwieldy if you're trying to invest a lot of money.

Yeah, tips are better for that.

TIPS are better for that for sure. And right now, honestly, you had mentioned that in October, tips were 5 year tips had a yield of 1.6 or something. Right now they've come down a little since then. I'm looking at the yield curve right now as of 16th December, 5 years or 1.47 and then it's pretty much flat 10 years or 1.35, 30 years or 1.4. But compared to where TIPS yields have been, the real yields on treasury bonds have been for the last, I don't know, five to 10 years. This is great, right? You can guarantee that you'll beat inflation by 1.5% over any time period you want. You know, this is about as attractive as tips have been in a long, long time. Now, there was a time right when they came out in like 2000 when you could get like 3 or 4% real on tips. I don't think we're ever going to Go back to that. Maybe it was because they were so new and nobody really knew what they were that the yields were so high. But if you ever see that again, back up the truck and load it up on tips. All right, let's take a question about asset allocation for bonds.

Hi Dr. Dali, thank you for all you do. For fellow physicians, we had a question in regards to asset allocation for bonds that we're hoping you can share your wisdom. My wife and I are in a fortunate position that the money we put away in tax Advantaged retirement accounts versus regular brokerage accounts will be in roughly a 1 to 3 ratio so that the majority of our money put away for future retirement will be in regular brokerage accounts. Our Asset allocation is 20% bonds, 10% REITs and 70% stocks with the bonds being 5050 nominal bonds versus TIPS and I bonds understand that except for municipal bonds, bonds should be held in Tax Advantage accounts. But on the other hand, there are arguments to be made to leverage room in tax Advantage accounts for total stock index mutual funds with higher long term expected returns to reduce the tax drag on the growth. How do you balance the two in your tax advantage accounts? At what point should one consider using municipal bond mutual funds rather than total bond mutual funds so that one can have some bonds in regular brokerage accounts and thus leave more room in Tax Advantage accounts for total stock index mutual funds to maximize growth potential in the long term? Thank you for your help and everything that you do.

Okay, good question. Kind of similar to the question we had earlier and kind of sums up what we've been talking about. It sounds like your tax protected to taxable ratio is about one to three. So you got to put a whole bunch of your portfolio into taxable. And when that's the case, yeah, bonds probably aren't a bad thing to put in there when your ratio is the opposite. If it was 3/4 tax protected, I don't know the bonds would go in there. I'd probably be putting things like a total stock market fund or a total international stock market fund in there. Those are very tax efficient investments. They do very well in taxable accounts. You can tax loss, harvest them. You can donate appreciated shares to charity. They're great things to have in a taxable account. And if, you know you just have a little bit of your money in taxable, I think those are probably the first things that tend to go in there. But if you've got to put a lot of your asset classes into taxable, then I think bonds are a reasonable thing to put in there, of course, in the form of muni bonds. Because muni bonds, of course, and if you're in a high tax bracket, have a higher after tax yield once you pay the taxes on the income that they're paying out. But there's been a time in my life when we didn't have a taxable account. Right. So these things change. Back in the 2000s, we had a taxable account and we ended up donating the entire thing to charity. And then we were back to 100% tax protected portfolio. And then a few years later, we were earning enough and saving enough that we were maxing out our tax protected accounts and still saving a whole bunch. And now our taxable account is our largest account and probably going to continue to grow. But just keep in mind that just because that's where you are right now doesn't mean that's where you, you will always be. Those ratios can change over time. But in your situation, 3/4 of your money now in taxable. Yeah. It's certainly reasonable to put some, if not all of your bonds into that taxable account using muni bond funds or something similar.

Agreed.

Okay, where are we at? We got another question about Vanguard. Zora is not happy with Vanguard. No, lots of people are not happy with Vanguard.

I wonder if she got a fake site.

Well, maybe, maybe not. But the problem with Vanguard is they solved so many problems. They basically reduced investing costs for everybody to the point where investing is almost free. And that caused them to become really popular and grow really fast. And part of this is Jack Bogle's fault. He always said that we're not going to be a tech company. We're not going to have the very best technology of any company out there. Because technologies, of course, is expensive, but it takes technology in order to service gazillions of people. And there is so much money flowing into Vanguard for the last few years that they literally cannot hire fast enough and train fast enough and boost their customer service experience fast enough to really take care of everybody. Everybody. And so you see that in complaints about customer service and screw ups and being on the phone for a long time to the point where a lot of people are like, is Vanguard trying to get us to open up a, you know, Fidelity or Schwab or TD Ameritrade account and just buy Vanguard ETFs there because they don't want to deal with our customer service? So I don't know. It's not that unusual these days to hear a complaint about Vanguard customer service. And I think that's probably what Zora is going to be talking about. But let's listen to the speak. But.

Hi, Dr. Dolly, this is Zora from Michigan. I wanted to inform you about Vanguard's recent activities. That raised some, an alarm and it was very disturbing. So recently I opened one Traditional and then one Roth IRA account, but without my knowledge they open a second account on my behalf. But they didn't really notify me of this. I called Vanguard, I talked to someone. Nobody was able to give me an answer. So I requested for one of the accounts to be closed. The account was closed. Then the. I transferred the money to do the backdoor Roth conversion. I transferred the money from the Traditional to the Roth ira. Noticed a few days later the conversion didn't take place. And then also the side, the account that was closed was opened back up and then the money was eventually transferred to that account. Just with all these events happening, I just don't feel comfortable with Vanguard. Is this normal? I mean, there's absolutely no communication from Vanguard whatsoever about closing and opening these accounts. I found I feel like they did all of this behind my back without any, any information, any communication?

Well, yeah, kind of classic customer service screw up. I mean, they botched it. They opened the wrong account. But let's keep in mind there's not something nefarious happening here. Right? Nobody stole your money. They just basically are showing incompetence is what they're doing. They tried to close an account and they reopened the account and they, you know, didn't do the Roth conversion like they were supposed to. Here's the deal. If you don't feel like Vanguard's treating you well, go to Fidelity. They're fine. Right? Obviously, don't invest in the super high expense ratio funds that Fidelity offers. But if you want to use mutual funds, Fidelity has a handful of very low cost index funds. And you can buy Vanguard ETFs there, you can buy iShares ETFs there. And you will have, you know, I would say 90% of the time you're going to have a better customer service experience at Fidelity or at Schwab than you are at Vanguard. You know, a lot of us have been with Vanguard for a long time. We feel loyalty to them for what they've done for the industry. We feel loyalty to Jack Bogle, even though he's been gone for a few years now. And part of it's just inertia. We started Investing at Vanguard 20 years ago and we're still there due to feeling loyalty and due to inertia but there's no logical reason you have to invest at Vanguard. If you feel like they're not treating you well, go somewhere else. You know, not to your bank or your credit union or some crappy place to invest. But there are other good options out there, and the main ones are Fidelity and Schwab. Go open a Fidelity account and I would expect that you will spend less time waiting on hold. You will probably have a better customer service experience, and there might be a few additional fees you pay here and there, but you can certainly invest in a Boglehead way in a very reasonable, low cost, broadly diversified way without being at Vanguard. Where are your investments held, Fish? Are yours held mostly at Vanguard?

Yeah, I have several accounts at Vanguard and then we do have some at Fidelity as well. So I have my solo 401k at Fidelity and the kids Roth Iras at Fidelity. But yeah, it's, you know, it's not easy dealing with these brokerage services, honestly, you know, But I think that's because they're, that's why they can keep their costs low too, at the same time. So like you said, there's, there's a bit of a headache, but you can move around in between them if you like someone better. I don't have, I have, don't have any experience with Schwab. What do you know about Schwab, Jim?

Well, I've actually invested with all three of these big three. And I've had Fidelity do something similar with accounts as what has happened to Zora Vanguard. Right. I've had them open the wrong accounts and stuff that had to do with the WCI 401K, which is relatively complicated. But basically I've got our Roth IRAs are at Vanguard, our taxable accounts at Vanguard, Our kids Roth IRAs are Vanguard. Our kids UTMA accounts are Vanguard. The WCI 401k is at Fidelity. Our HSA is at Fidelity. My 401k with my partnership is at Schwab. So, I mean, I'm using all three of these and I rarely call any of them. To be honest, almost everything I can do can be taken care of online. But I had to call Vanguard just this month to move some money from one brokerage account to another. And it was fine. You know, I waited on hold for a few minutes, not long. And I asked him to take care of something which was relatively complicated, you know, something that could not be done online. And I met competent people who took care of it. It was done right the first time. Money was moved over as Expected no problems whatsoever. And so. And I've had similar situations at Fidelity and Schwab. But you know, there's no reason you should feel like you have to be abandoned. Right? Especially with the ability to buy ETFs these days. You can invest in all Vanguard funds without ever sending any money to Pennsylvania. Don't feel like you're stuck there, Zora. If you had a crappy experience, you know, take your, take your business elsewhere.

Yeah, I actually interestingly have my kids utmas at Acorns because, because of their user interface. Just being so friendly for the kids. You know, it's an app based, this thing and they have these fun graphs. They can trace the growth of their money and kind of see what they own. So for that I pay $5 a month. It's, it's a lot for, you know, brokerage, but just because it keeps my kids interested and it's a better visual format, I'm willing to pay for that, you know, but it's, it's kind of. You do, you do get better service if you pay more. But I'm not willing to pay more for most of my portfolio.

You're dating yourself here this year. When you say $5 is expensive, right? Think about our parents, right? They were investing in the 80s or 90s, right. What did it cost to call up a broker and put in a trade? Like to trade from one mutual fund to another. You were probably paying a load of 8%, right. Plus $250 per transaction. You know, I mean, we can thank Jack Bogle for the fact that investing is practically free. Free these days when we're like, oh, there's a $5 fee. You know, you gotta pay 3.99 to trade an ETF. People have no idea what it used to cost to invest.

But it's free at Vanguard.

I mean, and it was routine to pay 1% plus for a mutual fund. You know, I mean this, yeah, this was the, the Vanguard revolution to, to bring these costs down, down, down, down. And even Vanguard's expense ratio started out out quite a bit higher than they are now. They weren't single digit basis point investment ratios. Now you can go to Fidelity and buy a total stock market fund. You can go to iShares, you can go to Schwab, you can go to Vanguard and you'll be under five basis points for all of them. It's free. You can buy every stock in the world for free. And you couldn't, you couldn't do that decades ago. And so it's interesting that now we think about $5 a month as being expensive.

I'm the frugal physician, remember?

If you're looking to boost returns, lower taxes and build wealth, join the WCI monthly Real Estate Opportunities list For tips and strategies to maximize your real estate returns. And for introductions to exclusive investment opportunities, expect educational emails that introduce you to syndicators, fund companies, online courses and online real estate platforms. Go to whitecoatinvestor.com re Opportunities to Sign up today. You can do this and the White Coat Investor can help. Don't forget about our survey white coat investor.com survey. Please, please, please fill it out. We will bribe you. We're giving out T shirts and a free online course of your choice for the winners of a drawing you will be entered into by taking the survey. Don't forget about our masterclass. If you have not taken that. If you're thinking about real estate investing, maybe not ready to come. Commit to the full no Hype real estate investing course. Check out the real estate masterclass whitecoatinvestor.com re masterclass. All right. Have we had any good, Any good reviews lately? Thisia?

I think so. Let me read one. This one is titled A Must listen for all physicians. Dr. Dali is truly serving the people who serve by sharing his knowledge regarding all things money, money, money. I've been listening to the podcast non stop since I discovered it a few months ago and cannot believe the amount of information I've not only learned, but retained due to the accessible nature of the podcast. Thank you, Dr. Dali. Love that.

You guys gotta say, give a few of these for Dr. Spath here.

Nah, I'm here to learn from you, Jim. Come on.

All right. Well, it's been good to be with you again. I know that that you're inundated with snow just as we are here. Yes, in Utah. But it's wonderful this holiday season to have a white Christmas. And until we see you again in the new year, keep your head up, shoulders back. You've got this and we can help. 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 on only. It should not be considered professional or personalized financial advice. You should consult the appropriate professional for specific advice relating to your situation.