7. The White Coat Investor | Bear markets, investing plans, income loss, and cushion cash

Jim Dahle is an emergency physician who is widely known by his moniker, the White Coat Investor. He's become one of the leading voices for financial literacy and intelligent planning for those who 'wear the white coat'. In this conversation, Jim gives perspectives and strategies on managing finances during a bear market. We address the dangers of market timing, the value of a written investment plan, how Jim invests his money, and why a good financial advisor can sometimes be the best couple's therapist.

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For full show notes of this episode and all sorts of other goodies, visit our podcast website

We Discuss:

• The definition of a bear market [02:00];
• How bonds differ from stocks and why some believe bonds are safer in a bear market [03:10];
• Why cashing out your whole portfolio when the market tanks may not be the best strategy [06:15];
• The value of having a written investment plan which tells you what you’re going to do if and when the market changes [10:00];
• Stock investments, and why it’s better to invest in a low-cost, broadly diversified index funds rather than individual stocks [12:15];
• Different ways for coming up with your individualized written investment plan [14:15];
• The importance of having an emergency fund in the event that your income drops dramatically, and how this money should be invested with the goal of having the best return OF the principal, not the return ON the principal [16:40];
• Ideas for alternate sources of income for physicians that can serve as another buffer in an economic downturn [25:00];
• Advantages and disadvantages of federal student loans [29:30];
• What we should do with leftover money, once we’ve fully funded our emergency cushion, 401k and Backdoor Roth IRA and contributed to our 529 [34:10];
• How to handle discretionary spending and the conflict that can arise when there’s spousal income inequality [36:00];
• Why having a no-questions-asked allowance can help your marriage [39:50];
• The wisdom of this advice: “Be generally frugal, but selectively extravagant” [42:15];
• What physicians should do if they’ve lost their job, but are still several years away from retirement [46:00];
• How we can help our retired parents who may have lost their nest egg in the stock market [48:50];
• The cost of health insurance and how it might be far more expensive than you think [52:50];
• Why renting your home to your business might be more than hoodwinkery [54:20
• The best financial mindset in an economic downturn is to take a long-term perspective and know that this too shall pass. [58:20].