June Newsletter - A High Income Covers a Plethora of Financial Sins

As a high earner, you have lots of wiggle room to make financial mistakes with your investments and still end your career with a comfortable retirement. You may even be able retire early still. The antidotes to your self-inflicted investing wounds are simple: earn a lot of money and don't spend all that much of it. We'll explain exactly what we mean and go into further detail below in June's financial tip of the month.

SPONSORED BY

Our newsletter sponsor this month is Lawrence B. Keller, CFP®, CLU®, ChFC®, RHU®, LUTCF and his firm Physician Financial Services. Larry has access to Guaranteed Standard Issue (GSI) disability insurance plans for Residents and Fellows at a significant number of academic institutions. These policies DO NOT REQUIRE MEDICAL UNDERWRITING1, Height/Weight (BMI) and participation in "hazardous" activities are also not taken into consideration. These include, but are not limited to, the Mayo Clinic, the University of Iowa, the University of Kentucky, Washington University in St. Louis, Albany Medical Center, NYU Langone Health, Mount Sinai Hospital, Stony Brook University Hospital. Keep in mind, if you apply for a medically underwritten basis and are issued a modified policy or are declined, you may no longer be eligible for a GSI offering. Contact Larry today by email at Lkeller@physicianfinancialservices.com, by phone at 800-481-6447, or these links to request a disability insurance quote or a term life insurance quote. 1 For eligible applicants. 2023-152529 Exp. 04/2025

ANNOUNCEMENTS

	Apply to Speak at WCICON24 – Make a BIG difference in the financial lives and well-being of the White Coat Investor community at the live conference February 5-8th in Orlando, Florida. Applications are open until June 15th. Go to Application
	WCI Scholarship – Application is now open until August 31st! We're also looking for volunteers to judge submissions and we welcome reader donations. Over $70,000 awaits the 10 grand prize winners. See All Scholarship Details
	Financial Basics with WCI 101 – This FREE email series will help you make well-informed financial decisions, avoid getting ripped off, and learn how to transform your high income into wealth. Enroll in WCI 101

MARKET UPDATE

Data sources: Morningstar and SPGlobal The debt ceiling negotiations and bill have caused turbulence in the markets this month, but now that the bill has passed, hopefully we will see things settle back down. AI (artificial intelligence) hype rallied the markets this month. Is the rally over?. . . time will tell. The last 12 months paints an ugly portfolio picture. While savings accounts are paying high interest rates, US growth stocks and precious metals are the only categories with decent 12 month returns. This month US growth stocks saw a significant gain especially when compared to US value stocks. That has been a trend for the year and helps show the long-term need for a diversified portfolio that includes both growth and value components. The gains in precious metals from April were all washed away in May, but gold and silver are still up over the last 12 months. After seeing some upward movement in Bitcoin last month, May saw a significant drop again. As always the volatility of crypto is what makes it so challenging.

REAL ESTATE OPPORTUNITIES

Wellings Capital – Helping accredited investors passively grow and protect their wealth with a diversified portfolio of carefully vetted recession-resistant commercial assets, such as self-storage, mobile home parks, and RV parks. Accepting new investors with a $50,000 minimum. Southern Impression Homes – Focused on new construction homes in desirable Florida neighborhoods that are designed to maximize landlord profit and minimize tenant turnover and maintenance costs. Its system provides full service, including acquisition, building, construction, property management, and ongoing client support and education. Please consider these introductions and be sure to do your due diligence prior to investing in any real estate investment opportunity.

FINANCE FUNDAMENTALS

Financial Priorities for New Attendings

	Disability Insurance One in seven doctors get disabled. Insure your greatest asset with Disability Insurance.
	Student Loan Management Plan If you are not going for PSLF and are in a typical loan situation owing less than 1.5X your gross income, then it's time to refinance your student loans.
	Emergency Fund Boost your emergency fund to 3-6 months of expenses before expanding your lifestyle.
	Retirement Accounts Get your employer match, then max out your HSA.
	High-Interest Debt Wipe out high-interest debt for a guaranteed return.
	For details on financial priorities for new attendings, read more here.

BEST OF THE MONTH

Best of WCI How Much Money Does a Doctor Need to Retire?: WCI celebrated FIRE week last month, and we explore this burning question for somebody who's thinking about hanging up their stethoscope for good. Leaving Dentistry and Finding Happiness: Columnist Tyler Scott tells his story about leaving his beloved profession and moving into a new realm of life—one that has made him a better person. The 9 Pros and 7 Cons of Whole Life Insurance: It's no secret that WCI is not a big fan of whole life insurance. But when writing this column, WCI Founder Jim Dahle actually found more pros than cons. The First 9 Months of Semi-Retirement: The Good, the Bad, and the Ugly: Columnist Anthony Ellis has been partially retired for nine months now. Here's an update on how he's making it all work. Spoiler: he's having a ball. The Lifestyle of Doctors Worth About $50 Million and How They Made So Much Money: You might be rich. But you're probably not as rich as these two doctors Jim Dahle recently interviewed. Welcome to the New WCI Investment Fund: Despite Jim Dahle's criticisms, WCI Content Director Josh Katzowitz put together a hypothetical fund with the help of more than a dozen readers. Let's see how this fund compares to VTSAX and FSKAX. 25 Sick Days in 5 Months: How Daycare Germs Are Costing Our Family: Columnist Alaina Trivax had a tough winter with her kids. It made her question her own decisions on childcare. Why I Hate Total Bond Market Index Funds: Total bond market index funds are not the way Jim Dahle would choose to invest in bonds. Here are some reasons why he doesn't care for them. It's a Lifestyle, Not a Vacation: It's become a WCI staff motto. It's not a vacation; it's the WCI lifestyle. Here's what Jim Dahle means by that. Investing in Turnkey Real Estate: This actually might be a really great way for you to invest in real estate. Top 20 Highest Average Earning Specialties: Is your specialty on this list? How does your compensation compare?

New Podcast Episodes Be sure to check out The White Coat Investor Podcast if you haven't yet. 30,000 to 40,000 are listening to every episode. If you'd like to leave a question to be answered on the podcast, record it here. #315 – 529's, Inheritance and Roth IRAs for Kids (Sponsored by CompHealth) #314 – Loving Your Timeshare with Cory Fawcett (Sponsored by SoFi) #313 – The Proposed Ban on Non-Compete Contracts and Whether It's Fair (Sponsored by Locumstory) #312 – Generational Wealth and Teaching Your Kids About Money (Sponsored by CompHealth) The Milestones to Millionaire Podcast has short episodes celebrating your accomplishments. #115 – Doc Pays Off Student Loans in 30 Months (Sponsored by InCrowd) #114 – Pathologist and Anesthesiologist Get Back to Broke (Sponsored by WCI Insurance List) #113 – Paid Off Student Loans and Bought a Car with Cash (Sponsored by SoFi) #112 – Family Physicians Start Direct Primary Care Practice (Sponsored by SoFi) The Passive Income MD Podcast #160 – Passive Real Estate Emerging Trends in 2023 #159 – How Physicians Can Get Started in Passive Real Estate Investing

Best of the Web Every month we recommend (about) 10 articles from across the web. Thank you to those who send us suggested articles. Is Getting an Additional Degree Beyond Your MD Worth It?: Let's ask 2,200 doctors who actually did that. What I Don't Own: Jonathan Clements goes through a long list of investments many of you own and explains why he didn't bother. AI Chatbot's Bedside Manner Preferred Over Real Doctors by 80% of Patients: Doctor Google has new competition. Oregon Emergency Physicians Unionize: They won't be the last. The Hidden Jewel of Emergency Medicine Careers – Why It's Time to Explore the VA: WCI gets asked about VA careers all the time. TSP, PSLF, what's not to like? Decreasing Real Wages for Emergency Physicians: Feel like you're making less after inflation? You probably are. Over 12% in the last year if you're the average emergency doc. SEC Charges Betterment for Misleading Statements About Tax Loss Harvesting: WCI has been asked a lot about this service over the years. Interesting to see the SEC getting into the nitty-gritty on this one. Use the Hidden Turbotax "What If" Sheet: Plan for next year using software you already bought. There Is No Index Fund for the Housing Market: But there could be. It would be interesting to see how it would compare. Where Have All the $200,000 Houses Gone?: Impressive graph in this one. In 2010, 45% of houses cost < $200K (> 80% were < $300K in 2002). Now it's < 1%.

TIP OF THE MONTH

By Dr. James M. Dahle, WCI Founder I recently had an interview on the Milestones to Millionaire podcast that illustrated a very important principle. I spoke with a doctor who had made all kinds of financial mistakes: day trading, not diversifying, individual stock picking, whole life insurance, getting bad financial advice, using HPSP to pay for medical school and coming out behind . . . you name it. Yet the doctor still managed to hit a net worth of $4 million by mid-career.

How did he do it? He maximized his income at every step (now earning seven figures) and had a high savings rate all along the way (as high as 50%-60%). You can screw up an awful lot with your investments and still be just fine if you earn a lot and spend very little. However, most physicians will never have a seven figure income and almost none of you are willing to save half of your gross for retirement. The less you make and the more you spend (listen up those of you in high cost of living areas), the less room for error there is in financial management. You can reverse engineer that statement too. The better you manage your money, the less you can work and the more you can spend. Consider the cost of a financial advisor. While I told people for years that they could get high-quality financial planning and investment management for a four figure amount per year, that is becoming harder and harder to find. Many good advisors are now charging $10,000-$15,000 per year. That's an entire month of take home pay for some doctors. If you do it yourself (and do it as well as the advisor would), you can now spend that extra $15,000 a year and end up in the same place. You can take the family to Europe for two weeks for that. Or buy a really nice fully decked out inflatable raft. Or a luxury handbag and bottle service. Or go heli-skiing. Every year. What about using index funds instead of actively managed funds? Let's say you end up with a 1% per year performance advantage and have a $2 million portfolio. That's $20,000 a year. That's one shift less a month for an emergency doc. Or bank that $20,000 every year and retire five years sooner. Or how about the difference between getting PSLF just as soon as you can instead of making a few student loan management mistakes and taking an extra year? That could be $24,000. That's a newish used car (or even a brand new economy car). Too many doctors think that because they make $175,000 or $275,000 or even $375,000 that they can live a lifestyle that is really only affordable on an $800,000 income. Newsflash! You don't get a pass on math. Whatever your income, you will need to not only live on it, but live on half of it. You see, 20%-30% of it may be going to the tax man and 20%-25% needs to be saved for retirement. So do what you can to increase that income, but also manage the income you do have well, at least until you are beyond "enough." At that point you can quit worrying about all the little things that help you to wring every last dollar out of your financial plan. Earn a lot. Save a lot. Make your money work as hard as you do. Enjoy the good life. This isn't that hard. You can do it. Tens of thousands of WCIers just like you already have and you can too. The White Coat Investor

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