Ep. 194 Financial Basics from the White Coat Investor with Dr. James Dahle

Special guest The White Coat Investor James M. Dahle talks with Christopher Beck about where physicians can start when it comes to financial literacy, including common financial mistakes docs make when start practicing, a primer on mortgage rates, and tips on insurance.

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SHOW NOTES

In this episode, White Coat Investor founder Dr. James Dahle and our host Dr. Chris Beck discuss strategies for physicians seeking to manage their personal finances and gain financial freedom.

First, Dr. Dahle explains the reasoning behind the famous quote, “live like a resident.” He explains that for an early career physician, their greatest wealth-building tool is their income. The income jump from residency to attending years can be extremely useful for quickly paying off student loans. Then, he moves on to discuss another way to resolve student debt, the Public Service Loan Forgiveness (PSLF) program. This option is ideal for physicians who have spent a significant amount of time working for a nonprofit institution (for example, during training and in academic medicine).

Dr. Dahle advises all physicians to reflect on their priorities when deciding where to allocate their assets. Possible categories could include retirement funds, 529 college savings funds, payment of high-interest debt, and emergency funds. We talk about the power of having a written plan to stay on track with financial goals and prevent ourselves from making rash decisions.

Next, we discuss different financial vehicles that can provide benefits for physicians. The “back door Roth IRA” strategy allows for yearly contributions to a tax-free retirement fund, even when a physician’s income exceeds the maximum limit for the conventional Roth IRA. Additionally, the funds in a Health Savings Account (HSA) can be used for investment, and then withdrawn at a later date, penalty-free. Dr. Dahle explains the difference between fixed rate and variable rate mortgages, noting that the latter is better for short-term loans because interest rates are unlikely to dramatically increase from year to year. Finally, Dr. Dahle covers the advantages of buying disability insurance as a way to protect physician income, especially for those working in procedural specialties.

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RESOURCES

White Coat Investor:

https://www.whitecoatinvestor.com/

White Coat Investor Podcast:

https://www.whitecoatinvestor.com/wci-podcast/

White Coat Investor Email:

editor@whitecoatinvestor.com

Passive Income MD:

https://passiveincomemd.com/

Physician on FIRE:

https://www.physicianonfire.com/