The WCI August Newsletter - Financial Tips for the Terminally Ill (and the rest of us)

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Disclosures

WCI News

I'm starting to get the impression that you all take just as much time off in the summer as we do. Blog page views always drop about June and then pick back up in the Fall. I hope you're having as much fun as we are. As you read this, we'll be floating on the Salmon River in Idaho. However, there is a lot of stuff going on right now in the physician finance space that I want you to know about.

First, thanks to everyone who applied to speak at WCICON22. The response was incredibly humbling-138 speakers offering over 250 talks. Needless to say, that was 5-10 times as many as we need. I wanted to hear so many of the talks but we just can't fit you all in. We'll have the speaker line-up out by September, but please don't feel too badly if you were not chosen. It was really competitive. I hope you'll still come and be with us and maybe even submit a guest blog post on your topic. Conference registration will open on Oct. 11th at 7pm MT. We're curious if it will sell out quickly like the pre-pandemic conferences did. Best to sign-up right away just in case (plus you get an early bird discount). You can sign up for a reminder at wcievents.com

Next, a reminder for you students out there that have been procrastinating your application for the WCI Scholarship. This is your last month to apply. Deadline is August 31st. We could use a few more judges too. Please email scholarship@whitecoatinvestor.com if you're interested. Students and residents can't be judges.

Three online courses that I want you to be aware of:

# 1 Zero to Freedom. This is from our affiliate partners at Semi-retired MD. This is THE course that teaches you how to do direct real estate investing. It's not a cheap course, but it does come with a no questions asked, money back guarantee you can use up until the third week of the 7 week course. Deadline for enrollment is August 3rd.

# 2 Expert Witness Course. Lots of white coat investors have taken this one and been happy with the results. This one will open again for enrollment on August 19th. Watch the blog for details and a link.

# 3 The WCI Real Estate Course is nearly complete. We expect to launch in September. Watch for details on the blog and in your inbox.

Speaking of real estate, if you're interested in private real estate investments (and lots of people seem to be after watching their stocks, bonds, and publicly traded REITs tank this year), consider investing with some of our partners. These include Origin Investments and DLP Capital, both of whom offer diversified private real estate funds. I've been investing with both for years. If you are more interested in direct real estate investing with its benefits, but want a totally turnkey experience, check out Jax Wealth Investments. Basically, you can buy a rental house in Florida and they'll do everything for you.

Finally, the student loan holiday appears to be coming to an end and interest rates are already higher. If you need some advice on managing your student loans, our recommended service is studentloanadvice.com. Be aware that their prices are going up starting next month, from $479 to $559 for new clients. You need to book by August 31st to get the lower pricing. Other changes starting on September 1st are that you get 12 months of free email follow-up instead of just 6 and repeat consults will get a $100 discount. When it's time to refinance, be sure to go through our links to get a cash bonus.

Market Report

Link to Spreadsheet Data sources: Vanguard, Morningstar, and SPGlobal

Well the Fed has had two huge interest rate increases in as many months. This is reassuring investors that they're serious about stopping inflation, but it still has a negative effect on the value of stocks, bonds, and real estate. The good news is your cash is paying a higher yield every month. The even better news is that despite the fact that we are now officially in a recession, stocks, bonds, and real estate were all up for the month.

Best of the Blog(s)

Lots of great posts from across the WCI Network this month. Check them out!

1. What's the Value of Our Time, Anyway? WCI Columnist Alaina Trivax helps you decide when to outsource chores.
2. Watching Stocks Return to Their Rightful Owners I wrote this one about proper bear market behavior.
3. Unleashing the Power of Your Income Lots of people liked this one. It's a really important principle for high income professionals to understand.
4. How I Went From a Negative Net Worth in My 30s to Early Retirement WCI Columnist Anthony Ellis walks us through his financial journey. You too can do what he did.
5. From Fourth Year to the Real World, Part 2: Transition from Med School to Residency Josh Katzowitz checks in with our cohorts of new interns.
6. 5 Financial Considerations for American Doctors Wishing to Live Abroad This is a great guest post for anyone serious about moving out.
7. The Real Cost of Private School There are a few topics guaranteed to generate a lot of comments: what people drive and where they send their kids for school are two of the biggest.
8. Asset Protection Made Easy The Physician on FIRE read my new asset protection book. He's even making a few changes because of it.
9. How to Thrive as a Physician in a Broken System We'd all love to change it, but the only thing we can really control is ourselves.
10. Post FI Notes 018: FI Within 5 Years of Fellowship This doc lost 90% of his crypto investment. Luckily, a high savings rate can make up for it.
11. 6 Early Budget Considerations That Lead to Financial Freedom Do you know about the 1% rule? You might like it. At least if you have a positive net worth.

Best of the Web

Every month I recommend (about) 10 articles from across the web. Thank you to those who send us suggested articles.

1. Investing in Home Renovations vs the Stock Market. Rookie mistake. Great article though. Who knew that replacing your garage door as the best investment (although still a bad one) when it comes to renovations.
2. Why Tax Loss Harvesting May Not Be a Good Idea. Kitces.com makes a case against tax loss harvesting (at least for some), but I don't think it's a very strong one. I keep finding new uses for capital losses, especially since the homeowner exemption isn't indexed to inflation.
3. How Well Do Retirees Assess the Risks They Face in Retirement? I love that this article lists out the biggest 5 risks. Do you know what they are? If you named all five before clicking, I'm impressed.
4. What To Do With Long Term Care Dollars? Self-insuring? Me too. So what do you do with the money? Mike Piper answers.
5. An Unusually High Marginal Tax Rate Means Paying Lower Taxes. Harry Sit points out the not so obvious.
6. When Does S Corp Cost You More? It can happen.
7. Why You'll Probably Never Run Out of Money. Mr. Money Mustache back in top form. He even used a doctor example. Of course, the doc only spends $50K a year....
8. Chaos is a Ladder. What's that old saying about how more money is made in a bear market than a bull?
9. Breaking Down a Tesla. No, not a Tesla breaking down. Doctors love Teslas, so let's learn a little more about them.
10. Lifestyles. And now for something different. I recently finished Endurance (Shackleston and crew in perhaps the greatest adventure story ever), so I liked this one was about sailing by Morgan Housel. It does tie into finance at the end.

Great Stuff from the Forums

The WCI Forum, subreddit, and Facebook Group continue to be great places to get some help with your questions. See these great topics that people are discussing now:

1. To Roth or Not to Roth It's an age old question, and the answer may be different for everyone.
2. How to Handle Finances in Dual Income Relationship I always thought the way we do it is the best, but there are certainly a lot of ways to do it.
3. Best Option After Car Lease Ends Another issue those who don't lease will never have to deal with.
4. Looking for Advice on How to Semi-Retire What happens when you're making $800K a year but hate it?
5. Purpose of Accumulating Wealth? What's your why?

New Podcasts

Be sure to check out the podcast if you haven't yet. 30,000-40,000 are listening to every episode. If you'd like to leave a question to be answered on the WCI Podcast, record it here.

• #271 Physician Online Advocacy with KevinMD (Sponsored by SoFi)
• #270 Tax-Loss Harvesting, Mortgages, Side Gigs, and More (Sponsored by Cerebral Tax Advisors)
• #269 Infertility Among Doctors (Sponsored by PearsonRavitz)
• #268 When Is It Time to Stop Being Cheap? (Sponsored by Provider Solutions & Development)

The Milestones to Millionaire Podcasts (all accessible at this link) are short podcasts celebrating your accomplishments! Lots of professional variety this month.

• #75 Postdoc Pays Off High Interest Debt (Sponsored by SoFi)
• #74 Urologist Millionaire (Sponsored by PearsonRavitz)
• #73 Radiologist Pays Off Student Loans (Sponsored by PKA Insurance Group)
• #72 Electrical Engineer Millionaire (Sponsored by SoFi)

Not enough podcasts to get you through the month? Try these from Passive Income MD!

• PIMD Podcast #117 How to Invest in Real Estate During a Recession
• PIMD Podcast #116 Real Estate Syndication 101 [How it Works]

New Videos

Come check out the WCI Youtube Channel. 489 more of you subscribed this month, now more than 18,300! Please subscribe, like, and share!

Tons of new videos this month. Here are just a few of them:

1. Employer Health Insurance Plans: PPO vs. HDHP
2. How Much Do Doctors Need to Save?
3. How to Access Retirement Money If Retiring Early

Tip of the Month

I had a sobering email this month from a mid 40s doctor who was recently diagnosed with a serious brain cancer. Thankfully, the doc was no stranger to WCI and had a large term life policy to take care of his family when the likely eventually happens, as well as a pretty good start to a retirement nest egg. However, he was still working, really not sure if he had 2 years or 20 years left, and trying to decide where to put his savings. Should he be saving in the 401(k) and Backdoor Roth IRAs like he had been, or switch to taxable knowing there was a very good chance he'll never make it to age 59 1/2.

We all have a terminal disease, even though most of us don't yet know what it is. Receiving a diagnosis like that certainly gives us an opportunity to step back and consider the way we are living our life. There is a country music song out there called Live Like You Were Dying. References include bucket list items like skydiving and "Rocky Mountain climbing", but also loving deeper, giving forgiveness, and speaking sweeter. The song romanticizes it so much that it almost makes you wish for the chance to live like you were dying.

Outside of some personal advice I won't share here, my financial advice to the doc was pretty simple. If he had a need or desire to keep working and saving, he should be piling up money outside of his retirement accounts. The life insurance policy plus the retirement accounts would be plenty to support his wife and kids. So I thought it was best to let the retirement accounts ride for her and begin accumulating the money that would be spent in between the time he stops working and dies. He was hesitant to give up the advantages of tax protected accounts, but I thought it would be simpler to just have it in taxable. More importantly than the account for me was the investment. I wanted him to keep it conservative, maybe even all cash. He's got long term investments already going for his wife, but HIS time horizon is now probably similar to that of an 80 year old, so he should invest the money he'll actually spend accordingly.

Now a reasonable case can be made for continuing to use retirement accounts. There are lots of exceptions for pulling money out of retirement accounts without paying that pesky 10% penalty (like disability!) Plus, even if he had to pay some taxes and a penalty, he'll likely be in a significantly lower bracket as it means he is now no longer working. But I think I'd just keep it simple and start saving outside of retirement accounts. More importantly, I would take a really careful look at how much I was working to start with. If there's a decent chance I wasn't going to be here in 5 years, how much of that 5 years do I want to spend at work? Maybe I'd cut back so much that I wouldn't even have anything to save, knowing that my family is going to be taken care of mostly by that term life policy.

Maintaining adequate insurance is also an important aspect of this family's financial plan. If it gets to the point where he is no longer working, they need to keep health insurance in force, either by COBRAing the employer's plan or getting their own on the PPACA exchange or via a health insurance broker. You definitely don't want to have a lapse at a time when you know your health care expenses are likely to be quite high.

Take a moment and ponder about the way you are living your life. What would you do differently if you found out tomorrow that you didn't have 30 or 40 or 50 more years? Start incorporating a few of those things into your personal AND financial life right now.

Thanks for reading. I'm grateful to have you as part of The White Coat Investor community. It makes Katie and I very happy when we read and hear of your successes.

Jim

James M. Dahle, MD, FACEP
Founder, The White Coat Investor

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