Jim Dahle: The White Coat Investor

Foreign. Welcome to the new retirement podcast. Today we're going to be talking with Dr. Jim Dali, a hockey playing emergency room doctor based in Salt Lake City, Utah, who runs White Coat Investor. In his spare time, we're going to dive into personal finance and retirement issues like how do you know if you've saved enough, what's a safe withdrawal rate, and how to bridge the gap for health insurance if you're retiring early, and how to catch up if you find yourself behind. I was referred to Jim by another one of our podcast guests, Jonathan Clements, who called him a genius. And from reading White Coat Investor, I also know that Jim is a fan of another one of our guests on the podcast, William Bernstein. So, Jim, welcome to our show. I appreciate your time. It's great to have you join us.

Thank you. It's wonderful to be here. I'm not sure I belong in the same sentence as those two, but that's very kind of you to say.

Well, they sang your praises and it's clear you're getting a lot of stuff done with White Coat Investor. It's been really interesting reading up on your blog. You've obviously got a ton of great content there, which we hope to share with our guests here as we get started. I'd be curious to hear, in your own words, how you describe yourself to other people since you've got so many hats on.

Well, to be honest, the most important hats are husband and father. I think most of us can probably say something similar about the relationships that we're in. My public Persona, however, is very much set toward promoting financial literacy for physicians and other high income professionals. And so in that respect, I describe myself as a blogger. You know, I guess I'm a podcaster now. I have a podcast and an author, given that I have a book. But when I first started out, that's how I described myself was just as a blogger. I wrote about stuff that I thought was interesting and that I thought would help other people. I think a lot of people have applied other terms to me since then. I'm not sure I deserve half of them. You know, some positive, some negative. But at any rate, it's been a fun journey trying to promote physician financial literacy in particular across the country.

Yeah. And what kind of, you know, kicked this off? And why'd you get started as a blogger?

Well, I mean, I have to go back a little further than that and kind of describe how I got interested in personal finance and investing because this is kind of unusual for somebody with my background. When I went away to college, I was interested in science. You know, I majored in molecular biology, got into medical school, into medical school, really had no interest in any sort of business classes or finance or investing or anything. And even after I matched into an emergency medicine residency. So at this point I would have been 28 years old and finally started earning my first real paycheck. At 28 years old, it wasn't a huge paycheck, but it was my first real paycheck. And just realized for those first few years, both before and after I started earning a paycheck, that every interaction I had with a financial professional seemed to go sour. And I felt very taken advantage of. Now the actual sum of money I lost was not very much, but I didn't like the way it made me feel. And so I decided I was going to start learning this stuff on my own. So I started reading books. I lived next to a used bookstore. I'd go over there. I read a ton of books. A lot of them were terrible, quite honestly, but I found a few good ones and then started interacting on the Internet, reading blogs and interacting on forums. And after a few years of that, I realized I was doing a lot more teaching than I was learning and nobody else was teaching this stuff to doctors. And so I kind of got sick of typing the same thing into the Internet over and over again and decided, well, let's start a blog and then I can just post a link to the blog post that answers this particular question. And that and a desire to kind of do something entrepreneurial, maybe some passive income was my theory. It turned out to be anything but passive. Led me to start the White coat investor in 2011, which, because there was basically nobody else in the niche, just exploded. I mean, the need was huge for this information among high income professionals. And so it's been a really fun journey since then.

Wow, what percentage of doctors do you think you reach right now, this topic?

I don't know a percentage of doctors, but it's definitely higher and higher each year. Among younger doctors, I would say the majority has heard at least of the White Coat investor. You know, they may not know me personally or connect me with it, but I would say the majority of younger doctors and a much smaller fraction of older doctors, I think just because I tend to focus a little bit more sometimes on younger docs and they're a little bit more savvy on the Internet. And I just think this sort of stuff kind of spreads a little bit faster in that population than it does among older docs that maybe have already decided and set themselves into their financial path and aren't really looking for more information about it.

Yeah, I've gotten involved and I've talked about this in the past. There's a group out here, Next Generation Personal finance, and it's all about bringing personal financial education into secondary schools where it's not mandatory. And there's a guy, Tim Ranzetta, that's kind of leading the charge there. In fact, that's where I met up with William Bernstein and Jonathan Clements at a conference here in San Francisco. But yeah, they're really trying to bring that to high schools. And sounds like the same problem exists with doctors, which is kind of surprising.

Yeah, for sure. You'd think these people that are smart enough to get into medical school and learn all this stuff would be able to handle finance, but it just turns out they're totally different fields and each has their own language. And just because you're smart in one doesn't make you smart in the other, it turns out.

Totally. Yeah. I was reading your blog and I've definitely seen this out there as well, that there's a lot of, especially doctors that are really high income earners, but they don't have huge asset bases that you would expect. If you see someone making a few hundred thousand dollars a year, you'd kind of think, oh, this person's going to have millions of dollars. And many of them have that or and they're not necessarily on the track. On track to get there.

That's a nice way. That's nice of you to say it that way. I'd call it pathetic. I mean, it's pathetic to go through 30 years of a physician like income, maybe a couple hundred thousand dollars a year, maybe more, and have a net worth under $500,000 in your 60s. But the statistics tell us that about 12% of doctors have a net worth under half a million in their 60s. That's everything. That's their house and car and everything. And it's pathetic, you know, and so I'm trying to really help that bottom quartile that is really struggling and that, that's basically anybody that gets to their 60s and still isn't a millionaire is a bottom quartile as far as physicians go.

Wow. Yeah. Well, it's a good, it's a good cause and I'm glad you're out there helping, you know, that whole demographic. So, you know, let's. I'd love to dive into kind of some of the top lessons you've picked up along the way here. I was Reading your blog, I'd love to hear, in your own words, what's your prescription for getting wealthy?

Well, I mean, this is one of those things that's simple but not easy. It's kind of like weight loss that way. But getting rich is pretty simple. You make a lot of money. You don't spend a lot of money. You take the difference between those two and you invest it in some reasonable way. And then you make sure you don't lose your money to litigation or to know things that you can insure against that, those sorts of problems, divorce and other losses. And that's basically the formula. It's really no more complicated than that. And if you try to make it more complicated than that, you'll probably end up, you know, shooting yourself in the foot. But for a doctor, the key is what I tell the young docs. This doesn't work so well if you're already 55. But what I tell the young docs is when you come out of residency, just keep living that same lifestyle like a resident. A typical medical resident's making 50 grand or so. And if you can come out of residency and still just earn, just spend like 50 grand a year while earning 200 or 250 or $300,000 a year, there's a huge difference between those two, even after tax. And you can use that to build wealth. You can use it to pay off your student loans very quickly. You can use it to save up a down payment on your dream house. You can use it to, you know, max out your retirement accounts and catch up to your college roommates when it comes to building a nest egg. But I don't tell people do that forever. I tell them to do it for two to five years. And I call that the live like a resident period. But if a doctor will do that, they can screw up almost everything else in their financial life and still be okay.

Yeah, it's a great way to frame it up. And it's also, it has some nice incentives for you if you can come out, keep, you know, you're already living pretty leanly, right? And keep it lean. And I think if you position to people, hey, you know, do this for five years, save a bunch of money, you may need to save a lot less money or stop saving money much deeper in your career versus what most people do, which is they go along through Life, they hit 50, and then they're like, holy smokes, I'm not quite ready yet. And they get super serious about saving, but they don't have the time value of money on their side.

The compounding effect for sure, that's a huge advantage of starting early. But the bigger advantage, I think is just avoiding that jump into your income. This is, it sounds weird to non doctors, but this is really hard to avoid inflating your lifestyle massively with your income when you walk out of residency. Because a typical DOC goes from 50,000 to $250,000 and their spending usually goes right along with it.

Hmm. It's almost like being like a pro athlete. They're suddenly, they've been living pretty frugally. Suddenly they kind of get this windfall and they also feel like it's going to last for a long time, so why not splurge? I can totally say why the behavioral finance side of this kicks in. It's hard to manage that idea of the desire to spend more money Right.

Then, yeah, the comparison to athletes is appropriate. You can throw entertainers and artists in there as well. But basically these are all people whose financial income is not based on their financial acumen. It's based on some other skill or talent they have. Whereas a small business owner, by the time he gets a physician like income, he's probably got a pretty good handle on finance and business and that sort of stuff. So I think he's much more likely to be able to manage that money well than typical artist or entertainer or athlete or physician.

Totally. I'd love to ask you a little bit more about your portfolio. It looks like it's evolved over the years and it looks like you had some of our other guests, maybe some bad guidance early on that got you into high fee, high friction costs investments. But love to just kind of hear in your words what your portfolio looks like and how you arrived at it and also how you stick with it given the ups and downs in the market.

Well, I suppose my initial portfolio was what the commission salesman masquerading as a financial advisor put me into. They were high load, high expense ratio, mutual funds. I wasn't in a very long. Luckily I stumbled on, I think it was Investing for Dummies by Eric Tyson. You know, within a year of starting investing. So I really didn't lose a lot of money there, but enough to learn a lesson for sure. And basically since that time, my portfolio really hasn't changed much. There's been some very minor tweaks in it, but for the most part, we've followed the same investing plans since 2004, 2005 ish. And it has served us very well. We're now multimillionaires and essentially financially independent. And so I can't complain about where it's taken us. But our current portfolio, if you look at the big divisions, it's about 60% stocks, 20% bonds and 20% real estate. About a third of our stocks are international stocks and we have a little bit of a tilt in the portfolio to small value stocks and then we have various holdings in the real estate category. But it's not a terribly complicated portfolio. I made a few changes a few years ago to simplify it a bit, but the overall asset allocation didn't change dramatically at that time.

Do you rebalance yourself or do you outsource that to a robo or some other mechanism?

Yeah, I do it all myself. The difficulty, particularly as a doc, is you end up with a whole bunch of different investing accounts. I've got three 401 s for me, one for my wife, we've each got a Roth IRA, we've got a joint brokerage taxable account. There's a defined benefit plan through my partnership, and that's not counting the health savings account and all the 529s and all, all that kind of stuff. So there's really no robo that's going to handle that. You know, you're either paying for a full service advisor to do that or you learn how to do it yourself. And you know, it turned out we started investing when we had a four figure net worth. And it's really the same game when you get to five figures and six figures and seven figures, it's just more zeros. And so it really doesn't bother me to move around hundreds of thousands of dollars as needed because it's exactly the same way I did it when I was moving around, you know, a few thousand dollars. So we've just been doing it ourselves and just haven't felt the need to hire somebody to do that for us.

Yeah, I think that's one of the issues that the robos have is that if someone shows up at the robo front door and that they have no money, it's totally clean, it's relatively straightforward. But if they have a lot of existing positions that might be in tax advantaged accounts or something like that, if you try to start liquidating these to reposition them, you're creating all these tax effects. That makes it not a simple thing to take on.

Yeah. Quite honestly, I think there's a pretty narrow niche of people for whom robo advisors are right. I think it's a pretty small step to go from using a robo advisor to doing it yourself. But I think going from a full service advisor to a robo advisor is a pretty big step if you're actually going to be doing things right.

Totally, yeah. And I think people are also taking a close look at fees everywhere. So I mean, it's happened with all the funds and people going to ETFs and trying to bring their fund fees down, their asset fees down. And then same thing with advice, people are looking for ways to cut those costs. I was talking to Carsten Jeske, the early retirement now guy, and he's like, hey, can I build a synthetic robo so I don't have to pay the 25 basis points for them to do the rebalancing for me, which starts to be bigger numbers as you get to larger asset basis. So I wanted to touch really quick one thing that's interesting to me is this idea of evidence based investing. I know obviously that stems from evidence based medicine and so forth, but any quick thoughts on how you view that and how it plays into what you're doing?

I've got two thoughts on it. Number one, I think it's important that people actually look at the evidence. For example, a lot of people think you can pick a winning mutual fund manager by looking at past performance. And the evidence is that you basically can't do that. You know, you look at the evidence and the evidence is that the best predictor of future returns is cost. You know, it's not a perfect predictor by any means, but it's the best predictor we have. And so I think it's important to understand some of the things the evidence does show us, you know, towards some of the things like factor investing with the score and value tilt and that kind of stuff. But I also think it's important to realize that investing is not physics. When you look at the amount of data we actually have, it's really only three or four independent 30 year periods. So don't put too much faith into the evidence. We don't know that the future is going to look exactly like the past and we don't know that we've actually seen the worst case scenario yet. Maybe the Great Depression was not the worst case scenario for stock investing. And so I think it's important to look at the evidence. Yes. But also understand the quality of the evidence and its limitations.

Sure, yeah, I definitely have that sense sometimes when I, I like the fire community a lot and a lot of things that they stand for. But I think there's definitely a deeply held belief there that things will always come back in pretty short order. I think that is their view. And in some countries, like Japan, you've seen like the Nikkei go down by a lot and stay down for decades. And we haven't experienced that here. And, you know, I mean, obviously there's.

Nothing that says we can't totally. It could happen. I think part of that is a lot of the fire community is fairly young. You know, if you're in your 40s in the fire community, you're considered an old man, you know, and so these people have not been investing through any sort of downturn that took a long time to come back. You know, some of them weren't even investing in 2008. And even if they were, which was my first real big bear market, you know, it snapped back pretty quick. And if you think that's normal, you might think, oh, well, no big deal, you know, I'll just ride it out for a year. But, you know, if you look back at 2000, 2002, it took quite a bit longer. And if you go back to the 70s, you can see that it can take many, many years sometimes for the market to come back. And that's in the most economically successful country in the world, you know. So I think it's important to be humble about what we know and what we can expect in the future.

Well, I think we're definitely aligned on what William Bernstein has to say about studying history and really paying attention to what the lessons there. Right. Because it's easy. If you just look in the near term history, you might feel better. But yeah, like you're saying, look back a couple decades or multiple decades, you start to see different patterns.

Yeah. Bill is certainly pessimistic about future stock returns, but he has been for quite some time, quite honestly. And some of his predictions of what they would be in the next decade or two have been a little on the low side. And so maybe he'll eventually be proven right. But it turns out that none of us, including the wisest among us, have a very clear crystal ball about what the future holds.

Totally. Yep. That's for sure. So I'd love to move on to some retirement focused topics, and since that's kind of the main area of interest for our audience, how do you think about what kind of income you need in retirement?

Well, I think the easiest way is to look at what you're spending now and actually look at those expenses and see which of them are still going to be there in retirement and what new expenses there are going to be. I Think there's no way to really avoid getting into the nitty gritty here. I mean, everybody wants a rule of thumb that you need 70% of your current income in retirement or whatever. But I don't think there is a rule of thumb. I think you actually have to sit down and see what you're spending and kind of project going forward what that's going to look like. I don't think there's any other way around it, but I think most doctors and high income earners who do that will discover that they don't need nearly as much as they think they need. For example, look at all the expenses that go away when you retire. You know you're going to be paying much less in income tax in most situations. You're not going to have any payroll tax. You no longer have to save for retirement. So for a really good saver, that's a huge expense off the table. The kids are hopefully out of the house and independent, so you don't have to save for college for them, you don't have to pay for their food, you don't have to pay for all their activities. You know, you're now financially independent so you can cancel your disability and life insurance. And so there's a lot of expenses that go away. Now a few of them might go up like travel and healthcare and that sort of stuff. But overall, I think a typical physician probably only has to replace 25 to 50% of her pre retirement earnings in order to have the same lifestyle in retirement.

Wow. Yeah, wow. That's definitely lower than what, you know, the general rule of thumb is given by the financial services industry, which is, oh, you need to have 70, 80% of your pre retirement income. But I think one thing I like to call it is that general financial services is focused on telling people, hey, you need to save a huge amount of money, an unlimited amount of money, just as much as you can and plan for really high costs because that's in their interest. Because most financial services makes money on you. The more assets you have, the more money they make because they're making a strip of it. So it's great to hear it from a different perspective. One quick comment on the children thing. I think I've seen some data that 20% of adult, young adult kids end up living back in your house for some period of time and 60% rely on their parents for some amount of financial aid. Wow. Yeah, there's some scary numbers out there right now.

I think you should use those statistics when you go to teach your Children about money. My kids have been hearing for years that when they're 18, they get their own car and their own job and their own apartment and they're out the door. And so I think that's their expectation. And to be honest, if they're like I was coming out, we wanted to be independent of our parents, you know, and so we work very hard to keep them from moving back in and playing video games all day in the basement.

Nice. So another topic, you know, how do you know when you have enough?

Well, I mean, that's a tricky topic. And the truth is, very few people, I think, end up with barely enough. I think there's some people like me that end up with far more than enough. You know, I'm in my 40s, I'm still working, I've already got enough. So I'm clearly going to have way more than enough by the time I'm done working. I think that's, you know, a minority for sure. But some people, it's just not an issue because you're going to have plenty of. And then there's some people that are never going to get to enough. You know, they're basically not going to have enough. They're going to have to scale back their lifestyle when they retire. You know, it's going to be spending less money on vacation, spending, driving not as nice of a car. You know, whatever they spend money on, they're going to be doing less of it. It's going to be, you know, what they can take from their savings, plus Social Security, maybe a pension, and that's it. So I don't think there's a lot of people that are right in that range of enough, quite honestly. And I think what ends up happening a lot of the time is they just adjust their lifestyle to what they have, which isn't that crazy of a concept if you think about it. That's what you've been doing your whole life anyway, is adjusting your lifestyle to what you're earning. It's not that crazy to do in retirement as well. So I don't think enough has to be some hard fixed number. That said, I think the best rule of thumb is the most basic one, the 4% rule. If you assume you can only spend 4% of your Nest egg in any given year, that number is going to start you in the right neighborhood as far as withdrawal rates. And if you reverse engineer that equation, it basically tells you you need 25% of what you spend as a nest egg, you know, what you spend minus any guaranteed sources of income like a pension or Social Security. So I think that'll get you into the right neighborhood. So if you're spending $100,000 from your portfolio, it's a 2.5 million dollar portfolio. That's what you need, right?

Yeah. 25 times. Yep. Yeah, that's what the fire community goes off of as well. One thing also I like to call out about income and retirement is that Michael Kitces says that really when you look at people's spending in retirement, there's about a 1% decrease in real costs adjusted for inflation annually, every decade your costs might drop 10% because you slow down, travel less, whatever, you're just a little bit less active over time. And that, that totally adds up over time.

Yeah. I've heard people describe it as the go go years. Your first few years in retirement when you're traveling all over the place. Your slow go years, maybe as you move into your 70s and you're still going, but not, you know, at nearly the pace. And then in your 80s, your no go years. And so what I think you see is a lot of spending at the beginning, then it kind of levels off. And then toward the end, as you might need some help with long term care and more healthcare expenses, your spending goes back up. That's kind of the pattern I've seen. I don't know that it's quite. It obviously varies for everybody, but clearly this idea that you're going to spend more and more every year is probably not the case.

Right. I'd love to shift gears a little bit and talk about health insurance because one thing we're seeing is more and more people are having a gap between when their traditional career stops and Medicare kicks in. And there's still obviously costs around Medicare as well. But what do you suggest to people that are looking to bridge that gap in health care or health insurance?

I actually kind of chuckle at this question. And the reason why is because I never get a question of how are you going to bridge the gap of food? Or how are you going to bridge the gap of housing. Right. When I look at my budget, I got food, I got housing, I got taxes, I got health care. They're all just expenses. And the way you bridge it is you buy it. You know, I've been buying healthcare in the open market for the last eight years. It sucks. It's expensive. Right? It's expensive stuff, there's no doubt about it. But you can buy it. You just go out there and pay for it. And so you need to have enough saved that you can buy it now. Are there some things you can do to help? Sure, there's a few things you can do. For instance, the Affordable Care Act. A lot of people are able to get their income low enough in early retirement that they get a substantial, substantial subsidy on the policies they buy through the exchanges. One option that one of my partners has used is to use one of the Christian Health Sharing ministry kind of options. This isn't really health insurance, but it's similar to it in that you can use it to help decrease the burden of unexpected health care costs. The real benefit is it's dramatically cheaper now, it doesn't cover some things that health insurance covers, and so there's some risk there. But his theory is if he develops something that's terrible or some chronic condition, within a few months, he'll be able to go on the exchange and buy an Affordable Care act eligible policy and kind of hedge his bets that way. But the main thing is you just have to have a way to pay for health care between the time when your employer stops paying for it and when you can start getting Medicare at 65. So I think everyone needs a plan for that. But the plan is probably just as simple as save up a little extra money and buy health insurance.

Totally. I know you were talking a second ago about HSA plans. It looks like you're pretty aggressive in taking advantage of every tax advantage account opportunity out there. Do you use HSAs any differently than most people in terms of trying to maximize the returns there? I know they're pretty efficient.

Yeah. A health savings account is my favorite retirement account. It's the only triple tax free one. You get the tax break when it goes in, it grows tax protected. And as long as you spend the money, when you pull it out on healthcare, it comes out tax free then too. So it's actually where my first dollars go every year when I'm investing. And then we invested aggressively. You know, it's invested all in stocks for us and it's grown well over the last six or eight years that we've been using one. Another cool trick with health savings accounts that people don't realize other than the fact that you can invest them. A lot of people don't realize you can invest them is that you can actually save your receipts and pull the money out later. There's no rule that says you have to spend the money in the same year. You take the money out of the plan so you can spend the money now, pull the money out in 20 years, and meanwhile it benefits from you Know, a couple of decades of tax protected compounding.

Wow. Are there any estate planning benefits to that or can you roll money out of that, out of an HSA into a Roth or something like that? Or does it have to be pulled out and used for health care?

No, it's actually terrible. On an estate planning side, this is not an account you want to die with. You want to spend this one before you die. Basically how it works at your death is it goes to your heirs and it's fully taxable income to them in the year you die. And so it's worse than inheriting a brokerage account. It's worse than inheriting a Roth IRA or a traditional ira. It's the worst thing you can inherit. And so this is something you should try to spend yourself if you can.

Yeah, I'm actually going to be on a webinar with Vanguard and Schwab coming up and we're going to be talking about kind of tax efficiency and. And I think a big thing that's going to come up for more people that have money is really looking at how are you locating assets? Are they in tax, are they taxable accounts, tax advantaged accounts, or totally tax exempt accounts? Thinking about multi year tax planning, how do you position assets? What should you try to roll over into Roth versus keeping certain places? In what order do you take things down? Because there can be a lot of efficiencies that can be gained there.

Yeah, it can become surprisingly complex and different for everybody too. For example, somebody who gives a lot of money to charity can flush the capital gains out of their taxable account and basically liquidate those at any time without having to pay much in taxes. Somebody that doesn't do that and has been investing for decades in a taxable account, there may be a real tax burden to liquidating that. So it really just varies by individual.

Yeah. Well, good problems for people to have if they've got enough money. Last quick topic on this. What do you suggest to people who find themselves behind? So you have those Doctors that are 50 or people that you run into that are kind of 50 plus. What are some of the tips you give them to catch back up?

Well, I think when you're behind, you've got a couple of choices. One is to make a dramatic change down the road or make a smaller change now. And you're usually better off making a smaller change now. And that may mean spending less and saving more. You know, most people have something saved, it's just not enough. And so any change they make can make A big difference. The other thing that is super helpful if you run the numbers is working longer. You know, I mean, it sounds like a terrible solution, right? I want to retire, I don't want to work longer. But the longer you work, everything works out better in your favor. You got more time for your investments to compound. Your Social Security ends up being higher. You need money for less time because your retirement's now shorter. You have less sequence of returns, risk from your investments performing poorly. Right. When you retire. It's just a great solution for most people to be able to do.

Totally. Yeah. And I think that there's a lot of other benefits to work as well. It's just, I think for many people there's social psychological benefits and obviously all the financial stuff and staying engaged and finding purpose. But I think for a lot of people it's like they want to do work that they enjoy and they find really meaningful. Just like you found with White Coat Investor in addition to being a physician.

Yeah, for sure. And the truth is, you know, the government wants to help you. Most of these tax advantaged accounts have a catch up contribution. Once you're 50, you can put an extra $1,000 to $6,000 into, into the account, you know, in a health Savings account, an IRA 401K. They want to help you save enough. And so that's one option. Another thing a lot of people can do is they have some sort of asset that's not really generating an income for them. Maybe it's a second home, you know, and they can start renting that out or sell it. Maybe they've got a boat they can sell and invest, you know. And so I think when you really find yourself, you're in a bad way and you're just kind of waking up to this personal finance stuff. You got to look at everything you have. And a lot of times, you know, making moves like that will make a big difference in your financial picture down the road.

Yep. Okay, last question here on personal finance side. And then I want to ask you some stuff about your business and White Coat Investor. But it looks like you're not a huge fan of whole or universal life insurance. Looks like you like it about as much as Ken Fisher likes annuities. Would love to get your, just to understand your perspective on that.

Hey, my thought on both of those types of insurance is if you understand what you're buying, you really understand it and you still want it, knock yourself out. Buy as much as you want. My problem is mostly in the way it's sold and it's sold to people that don't understand what they're buying. And three years or five years or 10 years later when they realize what they bought, they're mad. They're mad at the person that sold it to them, they're mad at themselves for having done it. Now they're struggling with this decision of whether to keep it or whether to dump it, which is much harder decision than whether to buy it in the first place. Place. But the problem is this thing can be used in so many different ways even though it's really not the best product for any of those uses, that those who are selling it, who are highly incentivized to sell it, you know, with big, huge commissions, can usually find your weak point and use that to sell it to you. And so I just run into doctor after doctor after doctor that regrets their purchase of it. And so I try to try to get the message out that this is like getting married. When you buy one of these things, either you're going to stick with it for life or it's going to cost you a lot of money. And so, you know, it's not so much. I have a trouble with the product. I think it's not the right product for almost everyone, including high income professionals. Certainly just being a doctor isn't a reason to buy a whole life insurance policy.

Yeah, no, I think I totally agree with you on like so much of financial services there just needs to be transparency, you know, and obviously like a fiduciary responsibility that would just, you know, fix so many problems in this space. If it was a consistent across the board and people could clearly see, hey, this is how you're getting paid and this is how much you're getting paid and where your incentives are, that would fix a lot. On to white coat investor. First, I just want to congratulate you for building the market leading site in this space. It's a great accomplishment and I'm glad it's working out for you.

It was really easy when it was the only one in the space.

Well, you've made some good moves to stay number one, right? It's. They say it's harder to stay number one, so hopefully that continues. And also on achieving financial independence, it sounds like you started making money at 28. What age did you achieve financial independence?

I would say probably just within the last year or so we've looked at our nest egg. We look at what we spend and said, okay, we're probably there now maybe a year or two ago, if we count the value of The White Coat Investor. But it's such an illiquid, difficult to value enterprise that it's kind of avoiding counting that toward our nest egg. But at this point, we just got to kind of realize that that's where we're at. I mean, at this point we're giving away more each year than we're spending.

Wow, that's impressive. So, you know, now that you've hit that milestone, you know, has that changed your thinking? I remember when we were kind of warming up to this, I asked you, you know, about remaining a doctor and your work at White Coat Investor. Has your worldview changed or what drives you changed?

I think I worry less about money. I'm much more likely to just spend money willy nilly now than I used to be, that's for sure, because I'm still working. I've got this great income both from doctoring and from the White Coat Investor. And I know I've already saved enough to meet my financial goals. And so that certainly changed my worldview in that respect. I've also dumped the parts of my job I didn't like. I've cut down to about half time. So I'm working half the shifts I used to. I no longer work any night shifts. And that was a big motivator for me to become financially independent. In our group, the way we distribute the night shifts is we basically let you buy your way out of them if you want to. And those who work them get paid extra and it's substantial amount more. So those with a big mortgage or big student loans or who just like to spend a lot of money, they can work my share of the nights and I'll work the day shifts. And so basically I've eliminated all the things I didn't like about practicing emergency medicine. You know, maybe not all, but most. And it's now a pleasure. You know, I love it. I go in, I see patients, I talk to them, I have a fun time, I see my friends. That work there's. And it's basically changed that work and the way I think about it in some significant ways. So I think that's pretty fun in that respect.

Well, it's great to hear. I mean, that is part of how we describe what we're trying to do. We're trying to help people first get financially confident and make the right moves and get efficient and then ideally achieve financial independence so that they can, I describe it as unlock their human capital. People. If people are doing things that they love and they really want to do, they're going to do a much better job at it and be happier and probably make the people around them happier and everything else. It's great to hear that you've achieved it and the effect that it's had in your life.

Absolutely. I agree with it.

I'd love to just learn a little bit more about what you offer. If you could run through. I know you've got the blog and a lot of other things that you're offering, and I might ask you a couple questions about those things.

Sure. Well, the first thing that we started in 2011, and I say we and back then it was just me, was a blog. It's just a blog. And it's still a blog. You know, three times a week a post comes out on it. On Mondays and Fridays, it's one I wrote. On Wednesdays, it's a guest post. I also have a couple of network partners. These are other blogs I own part of the Physician on Fire and Passive income md, which both have, you know, one has a fire focus and one has a passive income focus. And I run a post from one of them on Saturdays. And then I also have a podcast and I run the notes for that and publish the podcast each Thursday morning. And then we've also got a newsletter. It's a free monthly newsletter. If you sign up for it, you get what I call financial boot camp. It's 12 weekly emails that help you get up to speed with the rest of the White Coat investor community. We've got a ton of social media outreach. I've got my own forum on the site. There's a white coat investor subreddit. We've got a Facebook group, Twitter, Facebook, Instagram, Pinterest. However you like your information, we're trying to give it to you in that way. We've got videos up on YouTube. We run a scholarship contest. We just finished it. For the third year, we gave away over $60,000 in cash and prizes to professional students. We've had a live conference. We did it in Park City last March. William Bernstein and and Jonathan Clements were speakers there. You can actually buy the video version of that. We have an online course. It's provocatively titled as fire your financial advisor, which got a bunch of financial advisors up in arms. But once they look at the first module and realize it's basically how to work with your financial advisor, they're much less upset about it. But yeah, basically we're trying to package up this information into whatever form people most prefer it in just so they can learn it Nice.

And what's working the best for you. It sounds like the book actually worked pretty well.

The book's been a best seller for sure. It's the best seller in the space. But that's because I cheated. I read all the other ones and stole all the good stuff and put them in my book. Really the reason it's better is I farmed it out to 20 of my readers, had them tell me all the problems with it, fixed them, and then published it. You know, so in a lot of ways, it's crowdsourced, and I have to thank my community for that. What's working well? Well, the blog still gets a ton of readership. I mean, the website sees nearly a million page views a month, so that's. That's, you know, still the biggest part of it. But the podcast is right up there. Our podcasts are getting 10 to 15,000 downloads each. And so, which really surprised me. It was just kind of a side thing we decided to do on a whim. And I'm like, yeah, we can put some podcasts together. Let's see how it goes. But I think people prefer podcasts in my niche. You know, they can listen to it while they're commuting into work. So that's worked pretty well for us as well.

Yeah. Has the course worked out well?

Yeah, the course has been. I don't know if it's a best seller because I don't know of any other courses or what any courses really sell for, but it certainly exceeded our expectations financially. But most importantly, it really hit a need for a small percentage, admittedly of my audience, but with a big audience, that's a lot of people, just people that can do it themselves, but needed a little bit more hand holding, a little bit more information than they could get from books and blogs, but yet don't need full service advisor.

Yep, we're headed the same direction where we think the world needs more ways to kind of get this information, and we try to deliver a lot of it through software. We're all obviously trying podcasting as well, but we introduced our own ria, but it's flat fee, fee only. We're doing very specific kinds of engagements and just introducing it, but we'll see how that goes. Where do you see white coat investor going? Where do you want this thing to be in five years?

Well, I guess I'd like it to be more well known than it is, particularly among older docs, and I think that will happen naturally as the younger ones become older. I don't know that I plan to go anywhere you Know, I expect five years from now, I'm still going to be doing this in some form and just trying to promote physician financial literacy. You know, if I think about what kind of events could occur that would make me want to get out, it would probably be something like a financial literacy course being taught in every medical school in the country. And I think that's very unlikely to happen. And so I suspect I'll still be here, but we'll have a few more books out, probably a few more courses out. The conference will become a little bit more of a regular thing. And hopefully I can keep it all at a level that makes it manageable on a personal level so that I can keep doing this for a long time. I'd hate to burn out on blogging and podcasting like a lot of people do on medicine.

Yeah, totally. Well, it's good you're keeping it balanced and keeping it perspective. All right, well, look, this has been great as we wrap up. I would just love to hear any big influencers or sites or things that you love out there that you think would be valuable for our audience that are kind of 50 plus planners, you know, getting ready for this transition into retirement.

Well, absolutely. And we mentioned a couple of them earlier that have had a big influence on me. You've heard of the Bogleheads? Well, before I was a Boglehead, I was a Bernstein head, you know, and probably one of the first really good books I read was by William Bernstein that really influenced my financial thinking. Jonathan Clements is fantastic. You know, I didn't really find him until later, but that's a guy who really gets it. He writes a blog called Humble Dollar, which I highly recommend you follow and subscribe to. It's totally free. His book how to Think about Money is genius. It really is. And to give you a big picture look of how you ought to think about money, so I highly recommend those as well. Other people that are worth checking out, particularly if you are a high income professional, are my two partner sites. The Physician on Fire, that's@physicianonfire.com and passiveincomemd@passiveincomemd.com Some great resources there to help you to, you know, reach the financial success you're looking for and frankly, you deserve.

Okay, yeah, that's awesome. I appreciate that. And we'll definitely link out to those folks when we roll this podcast out. Okay, well, look, this has been great. I mean, do you have any questions for me? If not, we'll just wrap it up.

I don't think so. It's been great having me on. I sure appreciate it. It was great to meet you and spend some time with you and get to know and provide some information for your audience.

Yeah, I think this will be super valuable so I'll close it up here. So thanks Jim for being on our show. Thanks Dotto Robison for being our sound engineer. Anyone listening? Thanks for listening. Hopefully you found this useful. Our goal at New Retirement is to help anyone plan and manage their retirement so they can make the most of their money and time. And if you made it this far, I definitely encourage you to check out Jim's site, White Coat Investor and some of the sites he pointed to. And also our site and planning tool@newretirement.com where you can build your own plan for free or take advantage of our premium advanced tools and personal support. You can also check out our Facebook group or follow us on Twitter. Okay, that's it. And Jim, I really appreciate it.

It's great being here. Thanks.