- Dahle, J. M., & Bernstein, W. J. (2014) The White Coat Investor: A Doctor’s Guide to Personal Finance and Investing. S.I.: White Coat Investor
- Category: Finance
- Recommended Financial Literacy Level: [Novice]
- Recommended Audience:
- practicing physicians
- aspiring physicians (students considering medical school, medical students, & residents).
- parents of students interested in medicine
Admittedly, I’m a big fan of Dr. Jim Dahle, the founder of the White Coat Investor. Victoria and I actually first heard the term “Financial Independence” from him. We thoroughly enjoyed reading his book and are regular listeners to his podcasts. It may be cheesy, but we reserve the even-numbered episodes for when we are in the car together – it’s one cog in the machine of keeping us excited about talking about finances and retirement together. Honestly, I find his ethics, candor, and no-nonsense attitude not only refreshing, but also quite favorable amongst the financial blogs/podcasts out there.
While his book is obviously centered toward physician finances, I believe most individuals would benefit from reading it, especially if you consider others (such as friends, family, children, etc.) that may be interested in the medical field or other fields requiring professional school. The book is written in such a way that it is easily readable, avoids overwhelming its audience, and can easily be read in a few hours (took me ~4 hours while taking notes). Dr. Dahle does a great job of briefly explaining each of the chapters in the White Coat Investor, so to take a page from his book (quite literally, and two pages at that):
- Chapter 1 – The Big Squeeze
- How increasing tuition, decreasing reimbursement, and regulatory hassle are trying to ruin your life.
- Chapter 2 – Millionaire by 40
- How to have a seven-figure net worth five to ten years out of residency.
- Chapter 3 – If I Had a Million Dollars
- How to convert income to wealth and vice versa.
- Chapter 4 – Medical School and Your Wealth
- How picking the right school and specialty can affect your bottom line.
- Chapter 5 – Residency and Your Wealth
- Which financial chores you must do as a resident.
- Chapter 6 – The Secret to Becoming Richer
- How to get out of debt, buy your dream home, and hatch a nest egg within five years of residency graduation.
- Chapter 7 – The Retirement Number You Control
- Why your savings rate matters more than your investment returns.
- Chapter 8 – The Motorway to Dublin
- How to quit throwing your money away on stupid investments.
- Chapter 9 – Getting Off the Money
- What you need to know about investing in real estate, whole life insurance, private investments, and your own house.
- Chapter 10 – Paying the Help
- How to get good advice for a fair price.
- Chapter 11 – The Basics of Asset Protection
- How to protect your hard-earned money from lawsuits.
- Chapter 12 – Estate Planning Made Simple
- How to avoid estate taxes, protect your heirs, and avoid probate.
- Chapter 13 – Income Taxes and the Physician
- Why you pay too much in taxes and what to do about it.
- Chapter 14 – Choosing a Business Structure
- Why incorporating will not protect you from malpractice suits or save you much in taxes.
- Chapter 15 – Enjoying the Good Life
- How to quit worrying about your finances.
- Chapter 16 – The Mission of the White Coat Investor
- How to help doctors quit getting ripped off.
Jack’s Biggest Takeaways:
- I particularly enjoyed Chapter 4, which discusses the ins and outs of applying to medical school, including the costs/risks, and ways to mitigate that cost/risk. What I appreciate the most, though, was his effort to address the stigma of going to the cheapest school available to you and getting over the name-dropping mindset. It’s easy to get wrapped up in the social status or other appeals of a particular “dream” school, but Dr. Dahle really provides a strong argument for considering the potential financial impact of that decision. I believe his argument extends beyond medical school to all post-secondary education. Most of us probably have someone in our circle that either paid too much for their education or is still paying for it via student loans. I know more than one. In reality where earn your degree isn’t all that important in the grand scheme of things and certainly isn’t worth going more into debt for than necessary for.
- Dr. Dahle’s “Live Like a Resident” (for 3-5 years after residency) mindset is highly valuable and not limited to just physicians. We can all benefit from growing into our income slowly (or if you’re part of the Financial Independence movement perhaps never). The math is arguably fairly simple: spend less + save more = reaching Financial Independence, and perhaps much sooner than you thought.
Whether or not you decide to add this book to your collection, The White Coat Investor community is free to be a part of, and I highly encourage you check it out! I’m certain you’ll take something beneficial away from doing so. Victoria and I subscribe to his blog, and I am a regular visitor to the WCI Forum.
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Have you read The White Coat Investor: A Doctor’s Guide to Personal Finance and Investing? What are your thoughts, likes/dislikes, and biggest takeaways? Do you know anyone who spent too much on their education?